ROI – Return on Investment in sports betting
- Updated: 18th November 2019
Inside the world of sports betting, we should be careful with each market we plan to invest on. Well-sustained analyses are essential, but besides that, we have to have a good control of the entire volume of our investment and manage to quantify if it has been going well or not. On this article, we will approach the ROI in sports betting and how important it is for the financial health of your bankroll.
ROI: What is it and how to calculate it?
The term ROI is an English abbreviation for the expression Return on Investment. Basically, it is the tool that we can utilize to check if we are having a positive or negative result, considering the betting volume and the investment made on the bookmakers.
It has to be said, the ROI isn’t utilized only for sports betting, but for any business sector in the world. That means in order for you to increase your possibilities of profiting from sports betting, having a good control over your bankroll is essential.
In a clearer way: ROI will tell you if you have profits or losses, comparing to what you’ve invested on the bookmaker, with your gains and losses.
• ROI Calculation
To find the correct value, all you need to do is subtract your losses from the total you’ve earned and after that, divide by the total amount that was invested. Check how to do it below:
Total Profit – Total Losses / Total Investment
Let’s say you’ve made an investment of 1000 Euros and divided your bankroll into 20 units of 50 Euros each.
After a certain volume of bets made, you’ve managed to secure a profit of 300 Euros and a loss of 150 Euros, finishing with a net profit of 150 Euros (3 units). On top of those values, we can calculate the ROI and know how much you’ve won.
Since the calculation of Profit-Loss was already made, all we need to do is the remaining portion of the equation: 150/1000 = 0.15
Then all we have to do is multiply this value by 100 to have the percentage we’ve won over the initial investment.
0.15 x 100 = 15% profit on investment
How to utilize ROI to enhance our results in sports betting
Firstly, it is necessary that you understand that knowing how to calculate the ROI and quantity the profits or losses is important in order for you to become as professional as possible.
Since we’ve already learned how to do the math, now I will offer some tips of how to employ them on your own management.
When we calculate our financial balance, we don’t do it solely to know if we’re winning or losing money, but also to spot where we’re getting the most success or failing more.
I divide my bankroll into units and from there, I make a table to record where I’ve invested each unit, specifying the sport, teams and market where I’ve put my money on.
After this, I have a better control over where my biggest profits are coming from and where I’m losing the most money as well.
In football, I’ve managed to get a profit of 30 units, in basketball my profit was 15 units and in tennis I had a loss of 20 units.
On this example, we can calculate the total amount invested and compare it with the profit/loss, combined:
+ 25 units (combined between the 3 sports) / 300 units (also combined between the 3 sports)
On this case, I’d have a profit, which might lead me into believing that everything is right.
But that’s where management becomes important.
If I didn’t calculate the ROI for each sport or league such as Brazilian Serie A, Champions League or Copa Libertadores, individually, I would probably continue making the same kind of bets and lose a lot of money in the short/medium term.
Calculating the ROI for each sport allows me to have a real perception of where I’m making correct analyses and where
I’m making mistakes, be it with the analyses or even just on a poor streak.
I personally have a lot of fun when I’m betting, because I see the events that offer the most adrenaline and I end up furthering my knowledge in certain sports.
But that doesn’t overwrite the fact that I have a lot of knowledge of which markets I should bet on and where I should invest my money.
Your bankroll isn’t infinite so you should value your money, carefully analysing each step so that you don’t become another bettor that just takes shots in the dark.
Positive returns don’t appear out of thin air, you have to study, analyse and invest with confidence.
Look for tools to standardize those methods, in order for your line of operation to become safer and generate good returns in the long run.