There’s a genuine buzz that comes from “getting it right” — especially when you correctly predict something against the odds. This often manifests itself in a winning gambler’s swagger.
But before you start making it rain in front of your pals (as pictured above), you should ask yourself: have I been lucky, or unlucky? Is my current strike rate likely to continue? What does the future hold?
If you’re placing a lot of bets then you ought to stop and check whether or not your strike rate is realistic. I’ll show you how.
How To Verify Your Results Are Realistic
One of the main problems with sports betting is that there’s no publicly available frame of reference to show you whether your observed results are reasonable.
You might be winning — but you’ve simply been fortunate. Or you could be losing despite the fact you’ve consistently bet on value. It’s not as if the Bookmakers give you feedback and tell you “this was good value” or “this definitely wasn’t a value bet”. It’s down to you to determine whether or not your bets were smart ones.
The best advice I can give to casual bettors is to firstly record your odds and results, and then ignore what you’ve made or lost.
That might sound an unusual approach. But imagine the bulk of your winnings came from one or two long-shots, at say 30/1. Or the bulk of your losses came from bets where you lost large stakes, and only managed to win on smaller ones. These cases disguise whether your bets were truly good or bad value.
Estimating The Chance Of Striking A Win
To achieve more insight from a sample of bets, you need to work out the (mean) average odds. Simply add up all of the (decimal) odds together and divide by the number of bets you placed.
In the case of my Mug Bets, as of right now I’ve placed:
- Bets: 173
- Total Odds: 689.49
Therefore, the average odds I bet on were 689.49/173, which is 3.99.
Now I can work out what the “implied” chance (%) of winning those bets was. I calculate 1/3.99, which gives 0.25, or 25%.
So my bets, to date, had a 25% (or “1 in 4”) average chance of winning, according to the odds I took.
Are the Estimated “implied odds” accurate?
I used the Betfair exchange for all of my bets. I’m making the assumption that these odds are accurate — and on average they are. So for the sake of drawing a quick analysis, I’ll treat Betfair prices as the benchmark.
To find value you may decide to calculate your own odds and convert them into “implied chance” estimates. Alternatively, you can use an existing, proven data source to identify value odds. I recommend checking out:
How Have my Bets Performed So Far?
To assess my performance I need to count up how many of the sample bets won. Again, I’ll ignore the profit entirely.
In my sample I’ve had:
- Bets: 173
- Bets won: 70
Therefore, 70/173 = 0.40 = 40% of the bets won.
Now we have a comparison:
- Actual winners: 40%
- Implied chance of winners (based on Betfair odds): 25%
40% is what we refer to as the “strike rate”. Therefore, so far I’m winning +15% more bets than the market predicted. The question is, how realistic is that? Will this strategy be profitable going forward? Do I know something more than the market?
Assessing The Observed Strike Rate
My observed 15% over the expected win rate is probably a bit on the high side. However, with the average odds implying a 25% chance of winning, it’s not an infeasible result. Swings — a.k.a the “variance” — is increased by using high odds. If I’d used lower odds, there would be less chance of a ‘deviation’ occurring.
So if, for example, my average odds implied a 50% chance of winning each bet (2.0 decimal odds), then I would expect more predictability in the results. In other words I’d expect the difference between my real strike rate and the implied chance to be smaller.
As it stands I can’t be sure whether I’ve got an ‘edge’ in my strategy or not. While I’m doing well, variance could have worked in my favour; I could’ve been lucky. 173 bets simply isn’t a big enough sample to tell.
Update: by the end of my experiment, my betting results evened out and I broke even with a 0.00% ROI. Therefore my strategy did not have an edge after all. Early results over-performed.
Standard Deviation — a Step Further
The above steps are only a rough guideline. So if you’re still uncertain whether or not you have an edge in your bets, then you’re smart to question it.
The standard deviation is a number used to tell how measurements for a group are spread out from the average (mean), or expected value. A low standard deviation means that most of the numbers are very close to the average. A high standard deviation means that the numbers are spread out.
For sports betting, you compare the expected value (the implied odds) against the measurements (the actual results). What you hope for is a fairly low standard deviation, but with a positive edge in your bets within the region of 1-10%. I would avoid getting too excited if you observed better results than that — because betting markets are intelligent and very tough to crack. Your margins won’t be astronomical.
I’m not a maths teacher, so I won’t show you step-by-step instructions of how to work out the standard deviation. I don’t think you’d want to read it either. There’s plenty of tutorials and calculators online. It’s not unique to sports betting by any means.
The Most Important Thing To Know ABout STrike Rates
Most importantly, in any long-term betting strategy, the strike rate itself is meaningless unless the odds represent value.
Suppose you only ever bet on extremely strong favourites with average odds of 1.1. In this situation your strike rate will be high — because these odds have an implied 90.9% chance of winning. But ultimately there’s no gain if those odds weren’t high enough to generate a positive ROI over the long-term.
Similarly, betting on only high odds — let’s say 200.0 — would be certain to produce an extremely low strike rate given its implied 0.5% chance of winning. Yet if those odds are well-priced (good value), the strategy may still be profitable — albeit very high risk.
Whether you have a low or a high strike rate, the odds are everything. Strike rates only reveal the observed win rate — not the profitability of a betting strategy.