A good bettor will follow a strict control of the success of their bets. It is not enough to control the bank occasionally or to keep track of yield of our bets on an Excel spreadsheet, all factors that influence the bets must be taken into account to know if we are winning or losing with them. Therefore, ROI or Return on Investment is the best tool to check the profitability of our investment in betting.
ROI on bets
ROI is a metric used to check the net profitability of any investment. It is widely used in the stock or financial world, but we can also use it in the world of sports bets. It is calculated by dividing the net profit obtained by the initial investment made, which, in the case of sports betting, is usually one year. The ROI reveals how much money to invest for bets to be more profitable and which bets are more profitable.
How to calculate ROI
As we mentioned, the formula for ROI is Net profit / Investment made * 100. It seem easy, but several factors must be taken into account. Net profit is easy to calculate, while investment made includes both the bank and expenses related to bets, such as subscribing to a tipsters premium. The result of the operation will be the increase or decrease in investment in percentage form, but it is always easier to see with an example.
We have followed the evolution of our bets for a year and have obtained the following results:
- Betting benefits: 750$
- Bank: 800$
- Premium tipsters fees: 250$
Thus, we perform the following calculations:
- Net profit: betting profits - tipster odds = 750-250 = 500$
- Investment made: bank + tipster fee = 800+250 = 1,050$
In this way, we have obtained an ROI of 47.61%. This means that for every euro bet, we have obtained more than 47 cents.
If the net profit is negative, the ROI will also be negative and the figure obtained would be the money lost for every euro bet. Following the previous example, if instead of earning 750$ we had earned 200$ of profit, the net profit would be -50 and the ROI -4.76%. Therefore, for every euro played we would be losing almost 5 cents.
How to use ROI
Beyond knowing whether you are making profits or losses with your sports betting, knowing the ROI of your bets can have multiple applications for increasing the benefits of your bets:
- Betting profitability: first of all, we will know if we are making money or not with our bets, and that is already enough to value it.
- Betting segmentation: we can calculate ROI independently according to sport, competition, market, etc. You can reach interesting conclusions such as basketball being more profitable than football, over/under bets being better than Asian handicap bets, etc.
- Tipters rating: Is it really profitable to be subscribed to a premium tipster? You can separately calculate the ROI of your bets in which you have followed the tipster's advice and those you haven't and evaluate if the subscription is profitable.
Knowing the ROI of our bets will help Philippines become better players and make more precise bank management. We can check which bets or competitions are more profitable for us, where we should bet more to increase profits. If you really want to get the most out of your bets, remember that you must study and analyze your bets and the results obtained.