Sports betting is present for thousands of years since the ancient Romans used to bet at chariot races or the circus. Those are the furthest traces of sports betting we know, and to this day it has come a long way of improvements to this day. It has been evaluated to a whole different level. Now it is possible to bet and calculate the possible outcome from the comfort of your home, via mobile phone, or another smart device.
Nowadays, sports betting is considered a field of investments and has great similarities with well-known stock markets. Having a successful run in betting and getting high profits from it is a difficult endeavor, but there is ROI to assist you in at least figuring out what alternatives and strategies are excellent to pursue and which are not.
Betting is all about making incremental improvements to your betting tactics, and your ROI should gradually grow over time. The most essential thing to remember is to bet with tiny amounts of money; otherwise, you will not remain long until you declare bankruptcy.
What is ROI?
From a financial standpoint, Return on Investment (ROI) is a fundamental metric that calculates how much money someone gets back for the money they invested. From the gambling aspect, ROI compares actual earnings to the invested amount of money.
To paint a picture, let’s give a short example: Let’s say you picked a football team that has a match tonight, and you believe they are going to win. The odd of that happening is 2.00. You invested $100 and your gambling skill has prevailed and you got the money – $200 is yours! But, did you really win $200? The gambling store has paid out you $200 but considering your invested money which is $100, we come to the conclusion you just made a $100 clear profit.
Simple calculation: $100 invested * 2.00 odd = $200. Subtract the initial bet of $100 = $100 net profit!
That’s the thing ROI covers, and what we are going to explain in this article!
What is considered a good ROI?
Bookmakers usually observe the success of teams and players, as well as the money when odds are determined. The most likely outcome is reflected by the lowest return (the smallest odds).
If you invested $10 each bet on 500 games and generated a net profit of $300, your ROI is then 6%. This means that for every $10 you invest, you will receive $10.6 back, for a profit of 60 cents for every $10 wager.
Every ROI from 5% to 10% is considered a good ROI. It is easier to have a better ROI when a person bets within the smaller limit on small markets than to make it on bigger markets with a bigger limit. If you can get an ROI of more than 5% over a long period of time and just in large markets, you may consider yourself a successful bookmaker. But no one can keep the level of success in sports betting over a long period of time! On the other hand, anyone can have a successful spell in the short run.
How to calculate ROI?
The number of bets plays an important factor in calculating ROI and it represents a crucial aspect of it. A bookmaker with an ROI of 5% after 1.000 bets is more successful than a player who has an ROI of 10% after 100 bets. As we mentioned earlier, no one can keep the level of success in sports betting over a long period of time.
To calculate ROI, you just need to simply divide your net profit by your overall turnover. For instance, if you developed a system with 300 games and you won 25 of them, your sports betting ROI would be calculated: (25 units X $100) / (300 games X $100) = 0.08. This method would have an 8 percent return on an investment expressed in percentage terms.
ROI is the most effective technique to assess the performance of a betting strategy. It helps us in evaluating whether a system is genuinely lucrative and beneficial and whether we should change or continue with it. It can easily be calculated with the formula we explained above so if you are into betting, you should explore ROI a bit more and direct your betting strategy to it.