A lot is said in the world of sports betting, but not many give you the necessary tools to be able to truly work in sports betting. Be it when betting on football or on basketball or even other sports that you enjoy betting on, they have something in common that most people despise or ignore: mathematics.
MATHEMATICS IN SPORTS BETTING
Yes, if you don’t like mathematics, sports betting probably isn’t “for you”. A lot of people are far from this reality and are unaware that it is deeply connected with sports betting. That way, I will approach the mathematical aspect of this universe here and explain what the fields are where mathematics come into play and also make some comments about how important it is.
As I’ve introduced previously, mathematics is in the world of sports betting and in the simplest way possible, and from now on, we’ll only speak about that. Notice something interesting: the odds that the bookmakers give you are pure mathematics and keep in mind they are a price that is a conversion from a probability estimated by the bookmakers for a certain outcome. That means, bettors, that the mathematics are already with us.
A lot of people already know, but others don’t, so I’ll explain: you know that the probability are opposite to the odds right? Yes, simply put, with a simple calculation, you know how to find the probability of that event taking place with the odds that are being offered to you.
• Odds= 1.80 -> 1/1.80 = 0.55 * 100 = 55%
Something simple and easy to accomplish with mathematics and for those who want to win some money in sports betting, you’ll have to do this a lot of times. Try to have this “calculation” memorized and in your head because it will be very useful henceforth.
On bankroll management, mathematics is important again and it gets even more complex, since many of us already use a resource that comes with our computer, Excel, to help us. Here, the mathematics for bankroll management or for bet tracking are simple, simply being a difference between the wins and losses. A simple subtraction.
The correct term is the balance, reaching your betting balance through a calculation, or in this case, a subtraction. The difference between the profits and the losses, or the difference between the money invested and the returns.
The ROI or Yield are also accounting ways that the bettors must know how to utilize, formulas to calculate the ROI and Yield are important for you to monitor your path as bettors. The ROI formula is: returns minus the cost divided by the investment.
Example: imagine that the returns of your bets were 100 000 euros and the initial investment was 10 000. Utilizing the ROI formula above, we have:
• ROI = (100.000 – 10.000) / 10.000
• ROI = 9
On this purely illustrative example, the Return Over Investment was 9 times the initial investment. You can also multiply the result by 100 to obtain it in percentage – which would be a 900% return.
Now we’ll get to the part where many feel differences. If previously the math was easy to do, here it requires more mathematical complexity.
Simple formulas and simple calculations. The internet is full of articles with mathematical formulas. But now, beyond calculations, we must know what we are perceiving, the data we are dealing with and how we can relate it with different aspects and then extract the important information for the analysis we’re making.
Statistics is a very complex field, and with the data analysis included, it’s something I consider to be more and more important to know in sports betting. We’ll report here, not all of them, but the most popular and common terms and data processing formulas that are so common on this sports betting universe.
Well, many of you are already in “tilt mode”, others are aware of what I’m talking about. Poisson distribution is very commonly utilized in sports betting. But let’s take it step by step. This distribution is often utilized to “calculate” goals, “Overs” and “Unders”, because they are binary markets, for example.
But the actual definition of Poisson distribution is:
In the probability theory and statistics, the Poisson distribution is a probability distribution of random discrete variable that expresses the probability of a series of events taking place on a certain period of time in case those events occur independently from when the last event happened.
Other tools we can utilize in statistics to process data should be considered by you whether you utilize them or not.
Variance, for example, standard error or standard deviation, mode and even median. These are concepts you can utilize on your statistical analysis.
Many people don’t know and have never heard of this, others have already heard about it, but right now this is being heavily discussed in the world of sports betting, especially by the experts. It’s also very commonly used on the stock market. But the Kelly criterion is something that is being utilized for sports betting and it basically has to do with a probability theory. This criterion was created as a method for “Gambling”.
The Kelly Criterion gives us a different advantage over the other betting methods such as Fibonacci and arbitrage methods, because it represents a lower risk.
On the probability theory and on the intertemporal choice portfolio, Kelly criterion, Kelly strategy or Kelly formula is a formula utilized to determine the ideal size of a betting sequence, in order to maximize the wealth logarithm.
On most of the gambling scenarios and some investment scenarios under simplifying assumptions, the Kelly strategy will do better than any other essentially different strategy in the long term (which means, on a period of time where the number of bets that are successful match the probability of any bet being successful).
It was described by JL Kelly, Jr, an investigator at Bell Labs, in 1956 and it has been utilized since then.
Practical use of the formula
Basically, it is something we utilize where and how to bet I’d even say. Questions you will have to ask yourself before making any bet. Who? When? Where? Why and how much?
The formula for the Kelly criterion is:
• (BP – Q) / B
• B = decimal odds -1
• P = success probability
• Q = failure probability (which means, 1-P)
I won’t extrapolate this criterion further, there are thousands of articles laying around there and that are well detailed, even if I tried to explain it in a simple fashion. It is a complex subject, but it’s easy to understand, it only requires some attention from your part.
Something I utilize more and more, the models of linear regression for me, as a bettor, serve to show me a lot of things. Utilizing them in sports betting is normal these days and it’s becoming more and more commonly utilized by the expert community of bettors.
Definition and example:
In statistics or econometrics, linear regression is an equation to estimate the conditional (expected value) of a y variable, given the values of some other x variables.
The regression, in general, has the objective of looking for a value that isn’t able to be estimated initially.
This last sentence is truly stimulating, because keep in mind, when utilizing these models correctly, you might “estimate” a value or occurrence that you don’t know beforehand.
My friends, but isn’t that what we do in sports betting? Don’t we evaluate the data we have, analysis, before the match, and then try to “guess” or estimate a future situation with a good price and with value?
The linear regressions, due to everything I’ve explained so far, and not getting into more complex situations, because that is not the objective of the article, is being the trend for bettors right now.
Knowing how to use a predictive model based on linear regressions and some others, because from here, there are countless correlations you can utilize in your favour, and you might have an “edge” on certain market moves. There is a huge variance of correlations you can make and use, but don’t forget, especially those of you who bet on football, that you are betting on “low scoring” events!
These linear regression models are very commonly used for betting on the NBA, or MLB, or even the NFL for example, because the number of “goals” is bigger or has a bigger impact on the linear regression. Notice that the more data you can put on a regression, the more common points the line finds right?
Well, I leave many of you reflecting with this article, but it was only made for you to understand that in the sports betting world, mathematics and especially statistics and data processing is becoming more and more of a reality. Forget about those bets based on gut feelings, whatever the odds, or betting on a team just because “they score a lot of goals”, because there is an entire parallel universe associated with sports betting and data processing, and mathematics is always there.
I hope you’ve enjoyed this, I promise that one of these days I will write about each topic approached here in a more detailed fashion and try to simplify them as much as possible so you can understand each one of them better. These topics are complex, and they might have several interpretations and can be used on countless situations. Each bettor, when using them, will always do it on their favour, for their own method.
Good luck and merry betting. See you on the next article!