When it comes to analyzing your own betting performance, both Yield and ROI are important information. But many sports bettors and sports handicapper confuse these two things. So, let’s explain the difference between ROI and Yield on a real betting example.
The difference between the Yield and ROI explained on a real example
We will explain the difference between ROI (Return on Investment) and Yield on a simple example in real life for easier understanding:
Let’s say, that our imaginary guy (we will call him John) has extra cash of $10,000 for investments. He decides to invest in sports betting. He signs up with an online betting site and he deposits all $10,000.
For a simple example, we will say, that there are no deposit fees and he has exactly $10,000 on his bookmaker account.
He decides to divide his bankroll into 100 parts and he will make exactly one bet per day in the next 365 days. Every bet will be $100 and all profits and losses will stay on his sportsbook account. He will not touch the account for the next 365 days.
After one year, he made 365 bets, 100 EUR each. He won 195 bets and lost 170 bets. Right now he has exactly 12.760 EUR on his account. He made +2,760 EUR in this case.
- Starting Bankroll: $10,000
- Unit Size: $100
- Number of bets: 365
- Bets Won: 195
- Bets Lost: 170
- Net Profit: +$2,760
- Final Balance: $12,760
What does yield mean in betting?
Yield will measure betting efficiency.
How to calculate betting yield?
It is the profit/sum of all stakes.
Profit in our example is +$2,760. He made 365 bets * $100 = $36,500
Yield = 2760 / 36500 = 0.07562.
His yield is 7.562%.
What is a good yield in sports betting?
Everything around 10% is an extraordinary yield in sports betting, but an average yield between 4% and 8% is a down-to-earth way to make a consistent profit from betting on sports.
The important thing to understand here is the sample size of bets. A small sample size of bets always gives us unrealistic numbers and the yield will settle down after some time. With more and more bets the yield will usually go down and the truth about our betting efficiency is visible usually after thousands of bets.
What does ROI mean in betting?
ROI is a Return on investment. The definition for ROI calculation is this: for a single-period review, divide the return (net profit) by the resources that were committed (investment).
How to calculate betting ROI?
In our example, John made +$2,760 of profit with the starting money of $10,000. Remember, that this is his investment, not turnover.
His ROI in this example is 2,760 / 10,000 = 27.60%.
With the ROI we want to see, how much you gained in some period (one year for example).
Different sports betting sites use different names for ROI and the Yield. Most of the time Yield is named as ROI and one piece of information is simply ignored.
Ino matter how we name betting metrics, it is important to betting basics and understand the difference, how both yield and ROI are calculated. This is the only way to get the picture about betting efficiency, and how much you make in a specific period of time from betting on sports. You should track your own bets all the time.