Looking at Sports Betting as an Investment

The majority of the general public feels that sports’ betting is about finding a sure thing which is commonly referred to as a “lock”.  In reality this is just sales jargon because sports wagering can be just as volatile as stocks, real estate, currency or any other speculative market.  Obviously, the variance from season to season is tough to estimate, but as anyone who had a significant amount invested in stocks or real estate in 2008 can tell you, such swings aren't limited to sports.  Quite frankly, our service can yield a much higher return than the stock market. 
 

If the majority of the general public are not educated on gambling you can bet the majority of the general sports bettors are losers in their own right.  In fact, bettors actually win an average of 48% of their bets and compound that with the juice.  Most sportsbooks charge an average juice or ‘vig of your winnings of 10%, meaning you have to risk $100 to win $90.  This also means a bettor must win 52.4% of his games just to break even (wagering $100 per game).  Of course, as in any game of chance, there is variability in the actual results and just because you have won 56% in the past and expect to win 56% in the future, doesn't mean that you're going to win 56% this upcoming season. There is variance in sports betting as there is in most investments. 

Importance of Money Management 

Solid, strategic, well disciplined money management can be as beneficial as picking winners.  Think of it as needing a healthy diet to supplement your workout regiment.  Unless you are with a service that offers varying unit amounts per pick, it would be a standard percentage wagered per selection.  Most investors feel that no more than 2% of your bankroll should be invested on a sports pick for a consistent long term goal.   

Inside a Point Spread 

Point spreads were originally developed to keep bettors interest between two teams with different talent levels.  For example, if you have Alabama playing North Texas in football.  It’s quite evident Alabama would be the team favored.  When they played in September Alabama was favored by 37 points which means they had to win by 38 points to cover the spread.  Alabama won the game 53-7 and covered the spread for all Alabama backers and won by 46 points.  Point spreads are designed so that the probability of each outcome is roughly equal, and are generally set so as to approximate the median score differential between the two teams. 

While the odds makers do to try approximate the median margin of victory between two teams, they also try to reduce their exposure to risk by setting lines such that the public money will fall evenly on both sides of a game, so that they can offset the bets against each other and earn a profit on the juice without exposing themselves to large potential losses.  This means that oddsmakers are often reading the public perception rather than team performance which means that the general public sets the line. 

Final Thoughts 

With the right advice from our service we can provide information that will help you set positive expectations in uncertain markets.  With correct financial optimization and bankroll management, long term risks are nominal compared to the risks of investing in other, more conventional markets.  Just as a stock can fluctuate daily, a single team can win or lose on any given day.  As long as an investor maintains a long-term perspective and doesn’t over extend themselves by betting more than they can handle or playing catch up, the return should be attractive.