Advanced betting theory

The advanced betting theory is a system of ideas intended to explain successful betting in the long run. Those are important topics that are ignored by the majority of sports bettors and discussed over and over again by winning bettors.

More than 95% of traders and sports bettors lose and only a few win. The actual number of those who actually win big is much closer to 1% and the rest are break-even. This is a fact and such a hierarchy is seen in sports betting, poker, stock trading, and similar activities.

Evreryne who decide to start betting seriously, must honestly answer these questions:

• Do I honestly have the edge and be in the top 5% of all sports bettors in the World?
• Do I understand sports betting theory more than 95% of all bettors in the World?
• Do I put the effort, energy and time to stay in the top 5%?

The best betting experts and successful sports bettors in the world understand and constantly discuss the topics explained below.

Closing Line Value

Closing line value in sports betting is a difference between your actual taken odds and the odds just before the event starts. To see that difference, we must track our bets – download our free sports betting tracker. It is the most efficient point of the sports betting market and it reflects all important information – injuries, news, statistics, the money involved, and market sentiment.

Why is closing line important in a sports betting?

The closing line is important, because is the most efficient price on the market, and based on market efficiency theory it is impossible to beat. To become a successful bettor, you must best that line.

How line moves to closing?

When the market opens, sports bettors start betting and the odds (line) starts moving. The odds are the prices sports bettors pay. With more money involved, more information involved, the line becomes efficient to the kick-off, which is the last price just before the game starts.

To win at betting you must pay a better price than the rest and this means in theory, that betting just before the game start is not profitable. You must bet early and then compare the odds you bet with the odds that were offered at closing time. If you constantly get better odds than closing line, you are identified as a sharp bettor – or winning bettor.

Closing line better indicator of a successful bettor than other metrics

Closing line value performance is a better indicator of successful bettors than ROI or profit/loss record. Bookmakers identify sharp bettors based on CLV (closing line value) criteria.

From pinnacle, one of the sharpest bookmakers in the World:

“One of the main concerns among successful bettors is whether their success represents a genuine edge over the bookmaker or simply a stroke of luck. By tracking your ability to beat the closing odds, you have a measurable way in your hands to differentiate between reliable strategy and blind luck. A consistent track record of beating the closing odds is, therefore, an indicator of consistent profits in the long run.”

The best and most successful sports bettor constantly disccuss and focus on beating the closing line:

Spanky, Professional Sports Bettor

I run a technology advanced sports trading firm. Our goal is to beat the closing line which yields winners. This ensures the world’s best handicappers will always indirectly work for me whether they like it or not. I don’t work to beat the market, I make the market work for me

What is a good bet based on closing line value theory?

A good bet is when you bet on the odds, which are higher than they are at the closing time. For example, if you bet the day before the game starts at the odds of 2.30 and then the next day just before the game starts the same bet is priced at (no vig) 2.10 you made a good bet.

Example:

• Your taken odds: 2.30 (+130)
• Closing odds: 1.90 (-110)
• Closing no-vig odds: 2.05 (+105)
• Explanation: Because you bet at 2.30 (+130) you get better price than “the most efficent price at closing time”. Because of that you beat the market and this is a good indicator of successful bettors.

Randomness in sports betting

Randomness is a big part of betting. And if you deem something as random, you mean to say that it is unpredictable. An example would be a flip of the coin, which is seemingly random as you cannot practically predict which side a coin will land.

This impartiality of randomness is integral to some worldly matters. Randomness, therefore, matters when trying to make a decision based on fairness. However, is randomness unpredictable?

Betting systems are part of betting industry

When betting on a sports team, one usually places a bet based on their preferred choice of team. However, when a neutral fan or tipster picks between teams when the odds are fairly even, most tend to pick according to random correlations in data.

These correlations can correspond with many factors and variables, and some professional bookies will also formulate a betting system over them. If a particular correlation method favors the bettor, then the factors and variables determining that system are often exaggerated.

Despite the fact that a particular set of factors can never be completely deterministic, and the outcome almost always occurs at random, betting systems that try to overthrow randomness are a big part of the betting industry.

Therefore, even the most successful bettors will agree that while their betting system may be effective in getting them wins, most of what occurs during and after a sporting event is predicated on chance, and randomness is always at play.

Are there Patterns in Randomness?

There are no patterns in randomness, but our humanistic brain is unlikely to believe that. As humans, we are natural pattern seekers. Throughout evolution, humans have survived by recognizing patterns around them and acting accordingly.

Every data that entered into our ancestor’s brain had them reacting to it for survival, whether it was the long days of sun indicating a drought or particular sounds of chirping that hinted at their next meal. Thus, Homo sapiens built an intuitive appetite for recognizing patterns, even in things that work at random.

This is why most sports fans, even the most rational ones, will have superstitious sentiments towards their favorite teams. For instance, they are likely to put on a piece of clothing whenever they watch their favorite team play a fierce rival.

The reason why people resort to such ritualistic routines is that they recognize a repetitive pattern in which they had the shirt on, and their team was victorious. If this happens more than twice, it becomes a perceived pattern in their minds.

Final thoughts about randomness in betting

As you can see, the biggest problem here is that your consecutive wins over a betting odd may just be a lucky run. And to you, it may seem like a consequence of a solid, recognizable pattern. The best way is to collect the largest sample of your bets and analyze your win percentage.

Law of large numbers

Some laws and rules help people make better decisions on matters purely governed by luck and probability. By using the law of large numbers, insurance companies help set the value they charge insurance premiums for a car.

Similarly, casino players use the same law to set up their pay-out structure. The article will discuss how professional sports bettors use this law to decide which team they will place their money on. 

What is the Law of Large Numbers?

The law of large numbers is based on the principle that as the number of trials and occurrences increases, the observed or actual probability will approach the expected or theoretical probability. This helps tipsters have confidence over how events are likely to unfold in the long run.  

A common example of this law can be seen when you flip a coin. When you flip a coin, you know that the probability to end up with a head or a tail is 50 percent. However, this does not guarantee that if you flip a coin ten times, you will get heads five times.  

Nonetheless, if you keep flipping a coin and observe a consecutive outcome of heads, this cumulative proportion of the same outcome gets you closer and closer to 50 percent each time you flip.

Looking at this, consecutive outcomes of heads are expected to get averaged by tails by yielding an even number of heads and tails. This is because as the number of trials increase, the proportion between the two outcomes will likely reach 50 percent.

Law of Large Numbers in Sports Betting

This type of betting in the sports betting world is called the progressive draw strategy. Tipsters utilize this method by betting on consecutive matches and doubling up on their bets every time they lose. Bettors apply this method by making draw bets without taking into account the varying factors.  

For instance, at a sporting event, it is highly unlikely that there will be no draws. Although betting in a match with a strong favorite may not be wise, bettors double up on their losses in search of an outcome that ends in a draw.  

This strategy follows the law of large numbers by predicting a draw after accumulated outcomes of either wins or losses. Nonetheless, for bettors to use this approach to their advantage, they must have a large budget. This is because they might have to continue losing until the tournament’s first draw comes about, as there is no telling when it happens.

Final thoughts

The law of large numbers in sports betting can be the compass through which sports bettors navigate the randomness of outcomes of a sporting event. The overall idea behind it is that even though bookies cannot predict the result of an event, they know that an accumulated outcome will even out as time goes by. Therefore, following a strategy consistently despite losses will likely provide success over time.

Survivorship bias in sports betting

Many people draw conclusions and take life and business decisions by analyzing the businesses and people that succeeded. For instance, in the world of gambling, most people will turn to the minority of successful bettors and put them on the pedestal as the sole example of how things need to be done.

By limiting themselves to a single person for inspiration, they ignore all the differentiating factors that helped them get to the stop. Moreover, they overlook that each situation is different, and everyone is presented with a different set of challenges and issues.  

There is a reason you don’t find thousands of successful tipsters even though the most famous gamblers and tipsters are open with their secrets and methodologies. Similarly, all the successful people in the world have published books that discuss their successful paths thoroughly, along with the things they learned and their mistakes.

Yet, reading that book and applying the same rules does not guarantee you the same level of success, and the reason for that is survivorship bias.

What is survivorship bias

During the Second World War, the Hungarian Mathematician Abraham Wald was assigned the crucial task of determining which parts of the fighter planes required additional armor. Most airplanes during the battle could not survive, and the ones that did make it back to the airfield returned in terrible conditions, enduring plenty of bullet holes.

The damage on the plane was unevenly distributed. Most bullet holes were evident on the tail, fuselage, and wings, but the engine and gas tank were in better condition. The US army was left to decide on arming the planes, and they could only armor specific areas of the aircraft.   

The most obvious conclusion was to add armor to the most damaged parts of the plane. However, Abraham Wald put his rational mind to work and suggested that the unscathed parts of the aircraft needed reinforcement.

He was first to recognize that the only reason why some planes made it back home was that the fuel tanks and engines were unharmed, and the ones that suffered damage to those parts are likely to have crashed and burned.  

Thus, the fact that even the greatest minds in the US army made mistakes pertaining to common logic and concluded based on the survivor bias means that this conclusion is very natural, and most people will use it to base their decisions without realizing it. 

The Success of Survivorship Bias in Sports Betting

Using survivorship bias for betting can be detrimental to your bankroll. This, however, does not mean that you will not experience any success at all. Luck is a crucial factor when betting, which is why you may be disillusioned to think that the survivorship bias is effective after a couple of wins here and there.  

How can you Leverage this Bias?

Once you understand the dynamics encompassing the survivorship bias, you can use it to your advantage when betting. For this, you will have to work around it and learn more from the unsuccessful gamblers and focus less on the successful ones. 

Is betting skill or luck

Luck plays a significant role when betting on sports. However, if you are good at analyzing and understanding your win metrics over a long period of bets, then this skill can take you a long way in your betting career. 

Below, we will discuss the difference between the two and which one is more important in sports betting. 

Luck and Skill in Sports Betting Success

The questions regarding how much of sports betting wins comes from luck and how much of it comes from skill are ones that many bettors contemplate. The answer to this question can vary depending on the sport.  

Every sport has different conditions and winning odds. The sport where any particular event can have a huge impact on the outcome is one in which luck plays the dominant role when betting. For example, an early goal in hockey is a big deal, whereas an early touchdown in football may not be as much of a deciding factor.  

In other words, certain sports outcomes become increasingly predictable by only a single turn of events and situations in the game. Another example is a sport like a baseball in which the statistics of how many men are left on base, along with the batting average and scoring statistics, can all weigh in on the outcome.  

On the contrary, basketball is a game that is not impacted by too many factors unless a team scores three points right at crunch time. 

Therefore, you can say that basketball is the least impacted by determining factors because it involves a high volume of scoring, while hockey and baseball are most affected by events that happen during the game. 

Skill vs. Luck

In sports betting, you will find sports handicappers who win consistently by making bets purely based on luck, but this shouldn’t influence you to do the same.  Luck is a factor that comes into play in the short term.  

Considering the countless events that you can expect in a particular game, one cannot possibly expect a long-lasting career based purely on luck. A successful bettor needs the skills to make predictions not only based on the pattern of events but also historical data. 

To win bets consistently, you have to identify patterns and constantly adjust to the uncontrollable events that shape a sporting event.

Verdict about skill and luck in sports gambling

Sports with outcomes that are vastly impacted by slight changes in events are ones in which the aspect of luck weighs stronger than skill when betting. On average, 60 to 65 percent of sports betting is based on skill for most sports. 

The random occurrence of events also tends to follow a particular pattern, and the best sports bettors are ones that are able to predict those patterns and place bets keeping the statistics and events in mind. 

Overall, both luck and skills are deciding factors when you are placing bets, and their proportions can differ according to the specific sport and the timing of the event. Nonetheless, a skilled and analytical approach to betting promises wins in the long run.  

Wisdom of the Crowds in Sports Betting

Sometimes, it takes two to make the right decision, and other times, it may even take a crowd. What is sports betting but a set of decisions based on predictions? This is why basing your decision on the decisions of a large sample size is sometimes quite reasonable.  

It is, in fact, a theory that goes by the name of “wisdom of the crowds,” and for many sports bettors, this theory is the ideal option when placing bets in the face of high uncertainty.

Wisdom of the crowd

The wisdom of the crowd represents the collective opinion of a group of people rather than a single person or betting expert. This concept gives preferences to decisions taken from a large group of people rather than a single entity.  

It is quite common that people will keep their decisions and predictive analysis private as they are afraid other people will leverage them. However, once they apply their systematic approach or place bets without any second opinion, it often leads to a disaster.  

A group of individuals will make a better decision as each individual’s decision undergoes careful criticism until a collective and sound decision comes to fruition. It is also important to have relevant people in the group.  This is where this approach faces a backlash. 

The method will lose efficiency if individuals in a group are not relevant, reliable, or educated on a particular topic. To best utilize this method, the participants must be well versed in the subject of interest. This will allow them to precisely underestimate and overestimate each outcome and analyze all feedback and perspectives to come up with the right answer.  

Leveraging Wisdom of the Crowd Method in Sports Betting

By getting data from a group of individuals about the odds of a sporting outcome, you can use it to calculate an average outcome, which is a result of all over-estimated and under estimated outcomes. This means that the final answer will average between the “too highs” and the “too lows” and displays the most probable outcome. 

A bookmaker is likely to use this method by placing an upfront bet and exposing it to the public for appraisal. As more bets are entered for appraisal, the majority in the crowd is likely to inch toward the most probable outcome. The more guesses in the options, the more accurate the crowd-informed guess. 

However, as discussed earlier, when trying to gain an edge by using this approach, you must consider that the crowd wisdom may very well also be the foolishness of the mob. Most sports fans will place bets according to biased self-interests and emotions tied with particular teams. This is why you should be careful when basing your decisions.

To Conclude

Even though utilizing collective wisdom in a liquid market can be a great idea, one must have a keen sense of when the crowd is truly displaying wisdom, and when they lack it. 

Gambler’s fallacy

The gambler’s fallacy is well known in the sports betting and gambling worlds. In short, it is a fallacy of probabilistic reasoning. In this fallacy, a gambler makes the mistake of assuming that the dice they are rolling is fair, and each roll will be dependent on the previous ones.

This fallacy builds up in the gambler’s mind over time, as they start noticing a repeated outcome in the dice roll and start forming conclusive patterns that only exist in their minds.  

The Basic Fallacy

The gambler’s fallacy is very simple to illustrate. However, the concepts it encompasses are fundamental to reasoning with probability. One illustration of a gambler’s fallacy is a coin toss. Each toss will either end up in heads or tails. You assume that a normal coin will have a 50 percent chance of landing either heads or tails.  

In that sense, one can agree that a coin toss is not biased. Once you start tossing the coin consecutively and notice that you are getting the same outcome six times in a row, your brain will start telling you that the seventh toss will be a different outcome even though it is agreed upon that a coin toss is independent of all previous results and there is a 50 percent chance for each outcome.

There is something very natural for this line of reasoning as it makes us rightly believe that a string of similar outcomes cannot exist in the universe where randomness dominates. 

Thus, it is very natural to think that the next toss will even out the row of outcomes. However, just because it seems like a part of nature, it does not mean that it is true. As a result, you call this misconception the gamblers’ fallacy.

Gambler’s Fallacy in Sports Betting

When betting in sports, it is important to remember that the outcome between two teams is independent of the outcomes they produced in previous matches. 

Many gamblers will place their bet against an outcome just because they believe that the opposing outcome is overdue, which is a costly mistake that many will impulsively act upon. 

A Fair Chance Setup

To say that outcomes are unbiased is like saying that each of the possible results in a sporting event comes about as often as the other. To say that a coin toss is unbiased may also not be true. This is because maybe the coin’s weight has it land on the head’s side more often. Thus, there is a difference between unbiased and independent.  

One can, however, say that a coin is independent, as the current outcome will not be a predictable continuation of a previously formed pattern. This may or may not apply in sports, as some bookies rely heavily on past performances of athletes and teams when making their decision. 

Final Thoughts

The beliefs and faulty behaviors that fall under the umbrella of the gambler’s fallacy involve illusions of control. This involves a belief that the gambler has greater control over the outcomes because of biased memories of previous wins.