The letters ROI stand for Return on Investment, and they are often used in the world of financial trading. The practice can also apply and refer to betting, and many serious punters will take the time to analyse their sports betting ROI over a period of time.
Although seemingly simple, this is a strategy in itself, and it’s also one that can be used to analyse a number of other systems to see if they work for you. Here’s a closer look at ROI betting.
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Applying ROI in Betting
We’ve given a brief answer to the question of what is ROI in betting, so let’s now examine it more closely. Remember, the initials stand for ‘return on investment’, so this relates to the profit that you could expect to make over the course of your betting journey.
Bettors will consider ROI betting for a single stake, but the main purpose is to apply the calculations and see how things are performing over a longer period of time.
As an example, we’ll start with a simple tennis match: Let’s say that Novak Djokovic is playing Roger Federer in the final of the US Open. The theoretical win odds are as follows:
|Even Money (2.0)||4/5 (1.8)|
The punter decides to place a bet on Federer to win with a £10 stake. If that bet were to win, the return would be £20, including the initial stake. The pure profit, therefore, is £10, and the return on investment is 100%.
ROI figures in any area are shown as a percentage, and, in the above example, they are simple to work out. Of course, that example bet is by no means guaranteed, and the ROI would turn into a negative percentage if it were to lose.
This is why sports betting ROI is usually worked out over a longer period of time. It’s at its most useful when a serious bettor takes time to look at all the bets that they have placed over weeks, months, or even years. By doing this, they can decide if things are working or if they need to change their strategy in a bid to improve their ROI.
So what is a good ROI for sports betting? Opinions are divided on this, but most bettors will say that they are looking to make long-term profits in the region of 5%. That may seem like a conservative target, but it’s in keeping with other financial investments. Besides, we have to remember that the power of compounding applies here.
For example, if you have a £100 bankroll that grows 5% within seven days, you’ll have more money to use for betting during the following week. Thus, keeping a consistent average profit of 5% will result in big gains over the long term.
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How to Work Out Return on Investment
The above example showed a very simple calculation where the odds involved were set at 1/1. Over a longer period of time, regular bettors will get involved in a whole host of bets where the prices will be very different.
It’s important to keep proper records of all of those stakes, and without them, it just won’t be possible to work out your sports betting ROI. We suggest keeping a spreadsheet/ledger of all of those bets - preferably one that you can format to calculate sums automatically.
Enter each bet, win or lose, as it is settled, and then you can get that percentage. If you can’t find a suitable spreadsheet or you prefer to do manual calculations, then you have to apply the mathematical formula yourself.
At this point, when you ask what is ROI in betting, then you’ll need to work that out for yourself. If, for example, you have staked £1000 over a period of six months and your returns are £1050, you have a 5% profit.
Simply use the percentage button on a calculator to work this out. Remember that we asked the question “what is a good ROI for sports betting” and we came up with the 5% target. It won’t always work out this way, and you won’t have an easy calculation each time, so we do recommend that automated spreadsheet.
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Tips for Managing Your Return on Investment
There is no great mystery to ROI in betting, and you simply stake in a regular way. Find your best sportsbook, select an event that you wish to bet on, choose your stake, and hit the confirm button.
The important thing is to monitor that bet and add it to your spreadsheet as soon as it is settled. This is the only way to ensure that you can calculate return on percentage accurately. Of course, finding an online bookie that gives better odds will boost your returns over the long term. If you need recommendations, feel free to check out the reviews on our website.
Lastly, we recommend effective bankroll management. Try betting small, even sums that will only put 1%-5% of your bankroll at risk at a given time. If you find decent odds and are right more often than not, you’re bound to achieve your ROI target.
🧮Q: Why is it important to calculate my sports betting ROI?
💬A: If you are serious about sports betting, then you should be looking at ROI as part of your overall strategy. It will tell you if you are a success or if you need to reconsider your approach.
❓Q: Can ROI calculations be applied to a sports betting system?
🤔Q: What happens if I have a negative ROI?
💬A: If you have a negative ROI after one bet, that can happen. However, if you have regular losses over a long period of time, then you should reconsider your strategies. Our advice is to stick to a sport or team you know in order to develop a more informed betting approach.
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