Sports Betting as an Alternative Investment

There is no tax on betting in the UK which is a big advantage and no pari-mutuel system on horse racing.

You need to indentify the “product” eg a stock or a team – it doesn’t matter. The sportsbook makes its money whatever the result – they are merely commission-takers. You worship different gods and your path is one that runs through the wilderness and is not well trodden.

You will notice that I have not stated losing years – this is because they are rare – I have experienced one in my life time, my first. Winning bettors do not win money from a sportsbook, they win money from other losing players. Football (NFL) is big too though game numbers are few. Anywhere between 18% and 22% on betting turnover (that money actually put through the sportsbooks) annually. No corporate social or support structure, no lunches, no team environment. In the UK and Europe it is mainly Soccer and Horse Racing. But then no bosses, politics…you know the score.

Betting is also virtually recession proof, lets face it only a huge war might disrupt the national sports schedule. It is tougher psychologically as you generally act in a lone capacity. I would, however, estimate that the percentage of “losers” would be equally high in the world of stock trading and investment markets if you considered those individuals who entered that environment without the necessary experience. I wonder how many young people on Wall Street today can confidently say they will only have one losing year? There may be a handful, those engaging in arbitrage and those experienced in ‘selling’ as well as ‘buying’ the market – but there won’t be many.

Of course to many members of society – betting also carries a great big “loser” tag. You “buy” it. Baseball runs somewhere in between. I say curiously because if the book is doing its job properly, it is taking the action from both sides of the line (odds on the event) and simply taking the commission in the middle. The laws of probability defy accurate annual estimates.

Generally I have found that sports betting produces bettor average returns year on year. Most people trust their savings and investment income to experts and no doubt if the betting public trusted their income to the 1% or 2% of betting experts who made a profit – the loser label might become less sticky. Sports markets are not influenced by the economy. Very briefly the US pros generally turn to Basketball as a major source of income simply because of the sheer number of games -

Sports Betting as an Alternative Investment

by: Daniel B. The price you get in the morning is the price you stay with – unlike US horse betting which is subject to starting price odds and heavy taxes. This is not without justification since the vast majority of sports bettors do lose. Of course this could vary greatly – years of 30% and 13% would also be possible. You will love it or hate it..

This article was posted on January 29, 2005

<< Back to “Recreation And Sports” Index

So do the sportsbooks close accounts if you are a winning player? Well curiously the answer is ‘yes’. If your expectation of that product doing well is higher than the price on display – in relative terms. Remember a good bettor will still lose around 4.4 to 4.6 bets out of 10. I guess some books simply do not like winners – but many manage the action well and allow big bets. If you are not getting a value price, then you will find it hard to make a profit.

you need to bet high numbers of games to get the returns. King

Many will dismiss outright the ability to make good returns on your investment through the medium of sports betting. Big bets means big turnover, big turnover means big profits.

The Sports. It is not really surprising as betting is hard work, solitary, and you have to grind out thousands of bets to get your returns. Still, if you are not profitable in your betting after say 350 bets or thereabouts – it may be time to say “ok this is not for me” or “ok let me re-think my betting strategy.” You simpy cannot tell if you are a good or bad bettor after 10, 20 or 50 bets – with those low numbers you are still falling victim to standard deviation and probability.

So what kind of returns can you expect? .

The key to success in any trading or betting environment is value. Hockey does not have many takers but the lines are often the best value – the prices can be very generous. I am always aware of the possibility but I am confident I will never experience one again – partly because of the numerous hedging methods now available on the sports betting exchanges

Leave a Reply