Betting Wisdom | #10 The Importance of Volume

This series of posts focusses on some lessons I learned the last 15 years as a sports bettor.

VOLUME IS KEY !!

This concept applies mostly to everyone who wants to do Sports Betting in a way they can make an actual consistent living out of it (or grow so they can achieve that over time). The majority who just enjoys betting on a more casual level is best to do the complete opposite and stay very selective in the amount of bets they take.

Volume = The total amount of bets placed over time.
Turnover = The total $$$ amount that was wagered.

Sports betting involves an element of luck that creates a lot of variance.

Example:
No variance (Theory) = You bet 100€ on 2.10 odds with a 50% chance of winning and expect to win 5€
Variance (Reality) = You bet 100€ on 2.10 odds with a 50% of winning. If the bet Wins you are up +110€, when the bet Loses you are down -100€

What this means is that the short term ups and downs in Sports Betting are absolutely massive compared to what is actually expected to win. Having a proper Bankroll Management will prevent everyone to lose their entire bankroll and always stay in a position to keep going.

Having a combination of Proper Bankroll management with bets that have an expected profit is not enough to guarantee winning money over time though. This is where the importance of volume comes into play and it is key to everyone who wants to really beat this market consistently! The awareness around volume and variance is something that usually much more present in people that have been serious baout sports betting for over a decade and tends to continue growing the longer they are in it.

How many bets are needed to beat the short term luck factor that comes along with betting can be easily simulated and I would highly recommend everyone who is serious about betting to do this exercise. Just take the ROI that you expect to win based on a 50% winning chance. (+1% ROI = 2.02 odds | +4% ROI = 2.08 odds) Than just run a coin flip simulator and have a look at the swings. This should give you a fair picture on how many bets are needed to actually be sure of positive results in case your are somehow sure to play with an edge.

Low Volume Example:

Lets say someone is rather selective and takes 200 bets in an entire year. Having a +5% expected profit margin on each bet on the asian markets should be possible (50% on 2.10 odds). I simulated this for 10 year using this Coin Flip Simulator.

It is easy to throw around +7% | +10% or higher ROI example numbers, but those who do that rarely have the stakes to back up their claims. All numbers are also based on bookmakers that allow winning player. Off course there are always superstar in the betting world but they are rather the rare exceptions.

It is a complete coincidence that these numbers perfectly line up to the exact 5% expected ROI. This exercise should be done at least 10x in order to get a clearer view. Just based on this test run it can be seen that some years were massive while multiple years in a row were average running below the expected value. During a 5 year period less profit (20.6 units) in total was made compared to a single year alone that produced +31 units.

High Volume Example:

I once did this exercice for myself to visualise the ups and down when aiming for a +1.5% ROI with massive volume along with the compound interest effect. 100000 coin flips were done (100x1000 flips) with a starting bankroll of 800€ and 1.25% flat bets. After every 1000 bets, stakes were moved up or down if bankroll had grown with +25% or gone down with -20%. The compound interst is really crazy and turned 800€ into 57 Million after 100000 bets with a +1.5% ROI expectation despite the huge drop at the end. (off course this is all just theory and in reality it would be difficult to actually achieve this)

This bigger sample size shows the swings that are possible. The worst swing came at the end when stakes where highest. The coin flip results went 1416W-1584L over a 3000 bet sample.

Looking back at the shorter term example from above, this means that with 200 bets in a year expecting a 5% ROI, it is possible to go on a 15 year losing run doing -0.09% ROI dropping -26.4 units. This was not the only losing run. There was also an even longer 4878W-5122W run. This would give a 50 year period form the example above where it would only produce a +2.44% ROI instead of +5% despite a bet sample of 10000 bets.

Lessons Learned:

A lot of important lessons can be learned from doing this exercise and it is clear that without enough volume a lot still comes down to short term swings and just being on the good side of variance.

Quality vs Quantity: This balans is one of the most difficult things in Betting. Having limited amount of bets leaves someone much more vulnerable for random bad luck while having too many bets will decrease the ROI and highly increase the swings despite doing high volume. The combination of higher volume with a reasonable expected ROI (+2.5%+) is one of the ways to really get consistent profit when someone can pull it off.
Betting Records are Overrated: Betting records much more than most people realise are heavily influenced by short term luck. I talked about this on my previous article on Handicaping vs Following.
It is difficult to know your if are profitable: This is one of the more frustrating things about variance. It is really difficult to know if a specific betting approach, strategy, system, ... is actually profitable based on the results because there is always a fair chance that they are just based on random luck instead of having an actual edge.
Compound Interest is crazy: it really pays to move up and down in stakes since this will exponentially grow your bankroll over time. Being in a position where you are not forced to cash any winnings out also makes everything much more scalable.

Let me know how many bets you are taking on a yearly basis and how it is working out in the comments !

Betting Wisdom | #10 The Importance of Volume

VOLUME IS KEY !!

Low Volume Example:

High Volume Example:

Lessons Learned:

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