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What is Considered a Good ROI in Sports Betting?
12th December, 11:18ROI, or Return on Investment, is a financial term that can easily be applied to the world of sports betting. This acronym refers to the return that is generated on an investment. If you invest £100 on a FTSE 100 index listed share and it generates returns of £120 after one year, less fees, commissions, and charges, your return on investment is £20, or 20%.
Extrapolating the concept of ROI to sports betting is easily done. The difference however comes from the fact that ROI is indicative of the 'expected return' on your wager. Assuming you're betting on Liverpool FC in their upcoming match against Leicester City. These two dominant teams in the UK Premier League are strong performers, with Liverpool having an edge over the competition.
If you're looking to generate profits from a wager on this match, let's create some fictitious odds and see how ROI calculations play out:
Now, let's perform several ROI calculations based on a number of betting scenarios:
Bet #1: If you place a £100 wager on Liverpool to win the match against Leicester City, your return is as follows:
£100 wager *1.50 odds = £150. Subtract £100 initial bet = £50 profit.
Bet #2: If you place a £100 wager on Leicester City to win the match against Liverpool, your return is as follows:
£100 wager* 3.50 odds = £350. Subtract £100 initial bet = £250 profit.
Bet #3: If you place a £100 wager on a draw between Liverpool FC and Leicester City FC, your return is as follows:
£100 wager *2.50 odds = £250. Subtract £100 initial bet = £150 profit.
In each scenario, you can see that your £100 wager can do lots of different things, depending on the outcome of the match. If you bet on a Liverpool win, your profits are expected to be £50. If you bet on a Leicester City win, your profits are expected to be £250. If you bet on a draw, your profits are expected to be £150. In all cases, the odds give you a strong indication of the likely outcome.
While it is certainly possible to make any bet whatsoever, the likely outcome is the one indicated by the smallest return a.k.a. the smallest odds. In this case, it is a Liverpool win. Odds are indicative of probability, and while anything can certainly happen in football, or sports in general, the bookmakers tend to follow the performance of teams and athletes, and the money when odds are set.
To answer this question, we have consulted with scores of playmakers in the sports betting arena. The consensus, according to surveys of actual sports bettors indicates that a figure of 5% over 1,000 plays is considered an excellent ROI. In fact, this figure ranks a sports bettor in the same league as a bookmaker which assumes a vigorish of 5%. It is difficult to achieve a long-term ROI over 5% with a substantial number of sports bets being placed. That being said, the 5% figure only becomes worthwhile if the size of the bets is substantial enough to make it beneficial to the player.
There is a difference between an ROI percentage and an ROI £ figure. A set sterling amount is more difficult to achieve, given that it is dependent upon initial bet sizes. A set percentage amount says nothing of the actual £ payouts that are received; to get the actual return, one has to use an odds calculator. While certainly not advised, experts in the sports betting arena typically wager substantial sums of money on each match over time to make the 5% ROI figure worthwhile. Figures in the region of £500 - £1000 per bet are commonplace.
Be advised that these figures are simply used for illustrative purposes and are by no means recommended for casual betters. Let's make a hypothetical example out of this bet scenario: Assuming you're wagering £500 per wager with 5 bets per day. You can expect to wager £2500 per day * 352 days = £880,000 per year. If we add 5% ROI onto that, we get £44,000 in profit. As one can imagine, gambling at that level is inherently risky and certainly contrary to the norm for casual players who simply want to bet on the next UK Premier League Championship winner!