Variance in sports betting: an essential notion!
What is variance in sports betting? It is essential to understand the notion of variance in sports betting if you want to approach sports betting in the best possible way: Accept the loss of a bet, accept the bad run but also protect yourself from the tilt. Everything is explained in this article.
The variance is a statistical concept, which makes it possible to calculate the dispersion of the average deviation from the expectation. In other words, assuming you are betting on value bets, the variance in sports betting represents the average difference between your expected and actual winnings.
In sports betting, when you bet, with your average odds, you have an expectation of winnings or at least a balance sheet at equilibrium:
If you bet an average odds of 2, your expectation of not losing is 50% success (assuming you are on a fixed bet).
However, throughout the course of your career, sometimes you will have x% success in one month, sometimes y% in another, sometimes z% in the following month, etc. The curve of your bankroll will therefore oscillate.
These oscillations represent the deviation from your expectations; these oscillations are nothing other than variance. In short, this is behaviour other than a rectilinear progression; at least in the short term.
THE NOTION OF PROBABILITY
Now let’s go back in time and remember your mathematics lessons on probability. If you toss a coin, theoretically you have a 50% chance of winning the coin toss. However, out of a series of 10 throws, you will most likely flip x times heads and x times tails. However, the more you repeat the operation ad infinitum, the more you will tend towards the 50%.
Remember that in the short term, “what should happen will happen, no matter how hard you try to avoid it; what should not happen will not happen, no matter how hard you try to get it”.
PRECONCEIVED IDEAS ON VARIANCE IN SPORTS BETTING
There is only a large volume of forecasts to judge the profitability of a predictor.
Prejudging a series of defeats as well as victories on a small sample to gauge the quality of a Tipster is an erroneous judgement.
There is no indication that it is not in a variance with a phase of downswing or a phase of upswing that characterises the oscillations seen above.
In the picture above, you can observe the variance and its effects (oscillations represented by the up and down phases) on the Club bankroll over a period of 1002 bets.
SMOOTHING THE VARIANCE IN SPORTS BETTING?
None of us will deny that we have never experienced a long series of defeats. Never having lost a bet at the last minute, on a stroke of bad luck or luck?
By an unexpected event such as a red card or an unexpected injury, etc…
A whole list of imponderables, i.e. unpredictable events that cause the meeting to turn upside down. Imponderables at the very source of sport. Let’s not forget that sports betting is first and foremost subject to the vagaries of sport. And this will help us understand what happens next…
WHAT DOES IT MEAN TO SMOOTH VARIANCE?
Smoothing variance means minimizing its long-term effects. In the long term, it means obtaining a more or less straight-line progression. This progression can be positive or negative, but it leaves no room for chance. No room for the imponderables!
This is why a sample of at least 500 predictions is evoked to find out if you are a profitable bettor or not. The larger the sample of your predictions, the more the luck factor disappears. This is called variance smoothing.
MAKE VOLUME TO REDUCE THE IMPACT OF VARIANCE ON YOUR RESULTS.
The more volume you make, i.e. the larger the sample of sports bets you have, the closer your actual winnings will be to your expected winnings.
This is not illogical and has been theorised in mathematics by the law of large numbers.
This concept explains that when you repeat the same event based on chance a large number of times, the average of the results obtained tends to come closer to the expectation of the event.
This is exactly the image of the coin toss that I showed you in the introduction. Your expectation is 50% and the real result will tend towards 50/50 with the greatest possible number of throws. Except that if you only throw the coin 10 times it is possible that you only have 2 times the headstack side… By throwing it 500 times the gap will be reduced.
This implies that the more you tend to judge a balance sheet with as few counted bets as possible, the more you will apply the law of small numbers to which a high variance is subject.
BET FOR BET, THAT’S SILLY… PLAY VALUES BET!
Betting on all events makes no sense. Never forget to give priority to quality over quantity. So bet on the long term by betting only on good values. In an article, we explain the concept of value bet.
If you bet on anything and everything, you will certainly make volume but you will have little chance of being profitable in the long term.
Ask yourself the right question: In poker, do you see a lot of pro players going into battle with a pre-flop “2/8 mismatched”?
In sports betting, do you see a “pro predictor” take a 2 odds when he thinks it should be 4?
Volume + Value Bet = Long Term Gain
In conclusion, the more consistent your balance sheet, the more you will smooth out your variance in sports betting and you will reduce the luck factor. If your balance sheet is positive after several thousand bets (or even more than half a thousand), it is therefore unlikely that this is due to chance, but rather to a thorough and formal work on the analysis as well as the odds and the chosen bet on your committed bets. As sports betting is subject to significant variance, don’t think short-term.
The notion of variance can help you to overcome so-called bad run periods. If you keep a rigorous balance sheet, you will be better able to accept defeat by relying on your prognosis history. This will allow you to keep your self-confidence and stay focused on your next predictions without giving way to the tilt.