In general terms, survivorship bias means concentrating on successful entities (the “survivors”), thereby overlooking unsuccessful “non-survivors”.
Sports bettors will often only consider ‘winning’ tipsters, without giving a second thought to the ‘losers’ that have disappeared. While that approach seems logical, it’s important to recognise that successful tipsters are merely the subgroup that survived over a long enough series of bets. But are they really better than those that’ve come and gone? Is their performance level likely to hold up?
In this article I explore the reasons why unsuccessful tipsters or strategies shouldn’t be overlooked on the basis of profitability alone.
Survivorship Bias in Business
Consider that we live in a world where making the most profit is seen as the height of success. Many of us idolise billionaires and try to follow in their footsteps. But did you know that Mark Zuckerberg, Elon Musk and Bill Gates all dropped out of college early?
Survivorship bias means we’d judge that decision as ‘correct’ — because it worked out great for the billionaires. But dropping out of college is not statistically the best move, in terms of future earnings, for the vast majority of students. According to the BBC, the employment rate for graduates in the UK was 88% vs 72% for non-graduates. The median annual salary for a graduate was £34,000 ($43,000) versus £24,000 ($30,000) for a non-graduate. But we wouldn’t discover that information by only focusing on the most most successful cases.
The moral here is that you cannot purely look at a subset of cases — the “survivors” — to assess the quality of decisions. After all, who’s to say for sure that the tech billionaires’ success was linked to dropping out of college? And who’s to say that their success wasn’t a result of something else entirely?
The way our society views profit as success can create a form of tunnel-vision, distorting our view of the larger picture.
Survivorship Bias In Sports Betting
Understandably, profit is the most commonly used metric for measuring the success of any investment. The same goes for sports betting. Much like the financial investors are judged on their ability to produce a profit over a series of trades, tipsters also “survive” based on sports betting profit (or ROI).
The truth is, nobody wants to follow a tipster with a poor track record. Tipsters that lose for any sustained period will not attract subscription fees, and therefore will not continue to post their selections. They disappear.
The problem with that is a certain percentage of so-called “losing” tipsters will be onto something good, but didn’t hit the winning run required to raise awareness and build an audience; they failed to survive. Equally, some of those so-called “winning” tipsters will gain enormous exposure through a run of exceptionally good fortune; not because of any skill element. Thus the “winning” tipsters are the survivors of the process — but aren’t necessarily representative of what you should expect profitability wise, nor ones you should be following.
The same goes for your analysing own strategies. You could run 100 different selection methods with a sample size of 200 bets apiece, and come to find that only ten of them produced a profit. Yet if you discard all your losing strategies and focus entirely on the ones that won then you, again, run the risk of determining success by results and not the forecasting process. And if all you care about is results, you’re liable to make the wrong inference altogether.
You must bare in mind that variance (deviation in results) alone can create a profitable run of bets. So you need to study both winners and losers in order to find out what caused them; study the forecasting process itself to discover what lead to long-term success or failure.
How Do Tipsters Survive?
The majority of sports bettors will not question a winning run while it’s happening, but will quickly reconsider their approach after hitting a losing run. Hence it’s common for bettors to subscribe to a “winning” tipster account until results turn south. Then they dump it, and move onto another without any real thought. That’s how survivors and non-survivors are produced.
While some tipsters undoubtedly remain survivors through skill and experience, consider the following situations that may have enabled a weak tipster to survive:
- Variance. A series of bets can produce an abnormally high profit if the results deviate from the mean. Variance is increased by the following:
- Disproportionately sized bets. A tipster’s winning bets could have been made up of larger stake sizes than their losing bets. This often disguises a weakness in the selection method that will inevitably come to light in the future.
- Long-shot wins. For example, a tipster could hit on a high odds winner (e.g. 200/1) that temporarily makes a losing strategy appear to be very profitable until results even out.
- Insufficient data. Any strategy, even random selections, can appear to be profitable over a small data set. Over more data points, stats will settle to their true position and weak tipsters will be found out.
A more sceptical view of “survivors” in the tipster world is that they are simply fronting one of many strategies propagated by the same group. In theory rogue tipsters could open several accounts on a tipster proofing platform, each running opposing — even random — strategies. With enough aliases, one of them strategies will inevitably survive a series of bets, producing a profit that looks impressive. But a random strategy, without any real foundation in mathematics, will not continue to survive for long. Hence it’s a waste of money to subscribers.
A common experience bettors have in following tipsters is finding that results did not play out as they did before, often appearing completely erratic. That’s usually the case when the tipster has no edge, and positive past results were purely incidental. This underlines the importance of methodically analysing every tipster or strategy you use.
So the big question remains: how can you tell which tipsters have survived through luck, and who’s there through skill?
Identifying True Winners
While it’s tempting to think sports betting success is purely down to emulating the most profitable people, just remember that success can also come from luck, randomness and statistical anomalies. So to truly improve your basic approach to sports betting, and avoid survivorship bias, you’ll need to assess both winning and losing runs in equal measure.
I should draw your attention to another article I’ve written: How To Tell If Betting Results Were Luck Or Skill. In this article I provide five questions that you can ask yourself to better verify the performance of any tipster or strategy. The questions are as follows:
- Do you have a large enough sample size?
- How does your strategy perform on level stakes?
- Does your strategy have a sound methodology behind it?
- Is variance impacting your results?
- Are you beating the closing line?
Answering these five questions will help give some clarity as to whether you’re really onto a winner or not. Importantly, this will increase your chances of uncovering profitable tipsters/strategies that would otherwise go unnoticed.
Note that Punter2Pro incorporates an impartial and entirely data-driven method which rates tipsters on a number of key factors — not only profit. This includes the age of the account, sample size, and subscription cost. Check out the current Top 20 Tipsters.
- Betting Bold: The Art of Wagering Against The Grain - September 11, 2023
- August 2023|Top Football Tipsters Of The Month - September 6, 2023
- August 2023 | Top Horse Racing Tipsters Of The Month - September 5, 2023