ROI in sports betting and how to calculate it
In this article, Bookmaker Ratings will tell you about this concept in detail, as well as give examples of odds calculation and explain its usefulness.
What exactly is ROI
ROI literally stands for “investment profit” (return on investments). If we consider the classic business activity, then ROI is used to evaluate the effectiveness of investments. In sports predictions, the concept is similar.
When entering the betting industry, each player first of all asks himself the question: how effective will the investment decision be, how much will he be able to earn in the middle/long distance? But a simple calculation of expenses and income does not add up to the true state of affairs, because you also need to take into account the amount of initial investment. Therefore, it is necessary to build on all input data, for which ROI is used.
Calculation formula and example
The basis of the formula is detailed below. Here, the efficiency of bets is calculated, and in business terms, the efficiency of investments. The ROI formula looks like this:
ROI = (S1 – S2) / S2 * 100%
S1 is the winning amount, S2 is the sum of all bets.
Let’s take a simple example. Imagine that your account initially had 10,000 dollars. You made bets on 7000 dollars, not all bets were winning. As a result, you ended up with 11,000 dollars in your hands. Now we substitute all the values in our formula:
(11,000 – 7,000) / 7,000 * 100% = 57.14%
Remember at the same time that according to the considered formula, ROI can be not only positive, but also negative. The indicator will depend on how successful your bids were during the billing period. Due to the simplicity of the formula, ROI becomes universal for all bettors, and this gives reason to compare the performance of players individually.
Real use of ROI
Despite the fact that the ROI formula looks simple, and the calculation model itself is effective, the debate about how meaningful this indicator is still does not stop. Allegedly, many utility factors are not included in this formula. In fairness, we note that ROI does not have the highest efficiency in relation to business, but in sports betting the utility is high – an obvious fact.
The following pattern works well in betting: the more bets a player makes, the more useful the ROI becomes. Betting odds do not play a big role in this. Therefore, when looking at the statistics of bettors, you should not immediately consider a person with an indicator of 25-30% as a real forecasting guru, since it is possible that this is a beginner who made 10 bets, who just got lucky. Therefore, it is worth paying increased attention to those forecasters who have made 100 or more bets and have exactly the same indicators – which means they show themselves well at a distance.
ROI is the ratio of investment income for a specific period. It clearly shows how effective a player is in betting. A high ROI makes sense with a large number of bets, and the higher it is, the higher the income and benefits from the game. You can calculate ROI yourself, the calculation formula is simple and requires a small amount of initial data. In addition to ROI, bettors can use the YIELD indicator to determine their own gaming efficiency, which is calculated based on the ratio of net profit to the amount of funds allocated for betting.
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