For this size of bet, with a recommended betting bankroll of 100 average units, you would need a bankroll of £104,000. Like any investment plan, you need money to make money. So even if you are showing the ability to make a profit from your betting, in order to make a living at it, your first priority is in building your bankroll. You will not see pushes when betting on the money line. If a sport allows a game to end in a tie, that’s an outcome you can bet on. You only need to consider the possibility of a push when betting against the spread or placing a totals bet. If a push does occur, you will simply be refunded your money. It will not count as a win or a loss. In sports betting terms, odds basically serve two purposes. First, they are used to calculate the payouts of winning wagers. Every time you place a bet with a bookmaker, you’ll be offered odds at the time, which impact how much you can win. The higher they are, the more you stand to win relative to your stake.
Example: The door prize at a party with 25 people is given by writing numbers 1 through 25 on the bottom of the paper plates used. What is the probability that an individual had the winning plate? Example: What are the odds of winning the door prize above? What are the odds of not winning the door prize? P(6) = number of chips in the jar.
A common question from new or casual sports bettors is “What is a unit?”. A popular term in sports betting is “unit” and below I will explain what bettors mean they refer to a unit, and examples of it being used.
A “unit” in sports betting is a measurement of the size of someone’s bet. Because everyone has different sized bankrolls for sports betting, using the term unit is a way for us to show your profit or loss in universal terms.
Someone who is betting $10,000 per bet against the spread in NFL and is up $18,000 on the season isn’t nearly as impressive as someone who bets $10 per bet against the spread and is up $180 on the season. Using units gives us a tool to keep track of profits and losses without the dollar value.
Because basic sports betting strategy tells us that you should be betting somewhere between 1-5% of your bankroll on each wager, it is generally accepted that a unit is equal to approximately 1% of your bankroll. Nothing is set on stone with this, but that is an easy way to calculate a single unit.
Using the above formula, someone who has a $1,000 bankroll would be betting $10 per unit, while someone with a $50,000 bankroll would be betting $500 per unit.
Using the bankroll management strategy that recommends 1-5% of your bankroll on each bet you would essentially want to bet between 1-5 “units”.
Many sports handicappers will release their plays with units, with the most common being 1-5 units or sometimes 1-7 units. The 1,2, and 3 unit plays are more of the average plays, while the 4, 5 and sometimes 6 and 7 unit plays are the big plays where the handicapper feels they have found a lot of value on a play.
If a handicapper released a 5 unit play and you had a $1,000 sports betting bankroll you would be risking 5% (5 units) or $50 on the play.
When a bettor says he is +25 units on the year what does that mean?
This would be a measurement of his success on the season so far. Referring to being +25 units means he is “plus” 25x whatever 1 unit is to him. This could be +$25 for someone, while it could be +$25,000 for another.
How can a handicapper with a 25-32 record be +15 units?
It is possible to have a sub .500 record but still be up units if you are betting on underdog or “plus money” selections. For example, picking only NFL underdogs on the money line could lead to a negative record but profits on the season.
Can a sports bettor actually be +1546 units?
There is a lot of ways you can inflate your numbers to make yourself sound good. Like I said earlier a unit = 1% is just a general guideline and everyone has their own way of doing things. Read the fine print. 1 unit to that bettor could 0.001% of their initial bankroll for all we know.
Below is a video basically going over what was said above…
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How do you build a sports betting model? What steps are involved? What do you need to consider? Follow these steps to build your own quantitative model, and take your betting to the next level.
What is a betting model?
In it's simplest form a sports betting model is a system that can identify unbiased reference points from where you can determine the probability for all outcomes in a particular game.
The model will ultimately be able to highlight profitable betting opportunities, by judging a team's true ability more accurately than a bookmaker.
However, building a sports betting model can be difficult and time consuming. There are various instructions and orders advised for you to follow when creating a model, which can complicate the process.
With that said, once you have created a successful betting model, it can show you opportunities that the general betting public simply wouldn't consider.
Let's begin.
For this example we use an approach similar to the Actuarial Control Cycle – a quantitative risk assessment employed by insurance companies. There are five main features:
- Defining the problem
- Building the solution
- Monitoring results
- Professionalism
- External forces
Step 1: Specify the aim of your betting model
This appears simple, but many sports bettors miss the point their betting model is trying to accomplish.
Once you have created a successful betting model, it can show you opportunities that the general betting public simply wouldn't consider.
Without an aim you could be overwhelmed with numbers and lose focus of your overall goals.
Although you may argue you can get the data first to see if there are any patterns, this would still need to be tested against a number of hypothesis, each with a different aim.
Therefore starting with a specific, rather than a generic aim, is strongly recommended.
Step 2: Select the metric
Write-in Game Betting
The next step is to formalise your investigation into numerical form by selecting a quantifiable metric.
These first two steps relate to defining the problem stage of the Actuarial Control Cycle.
Step 3: Collect, group and modify data
Every model needs data so you can integrate it into your algorithm. There are two ways of collecting data – by yourself, or by using other published data online.
Luckily, there is a plethora of data available on the Internet, some of which is free, while some websites offer a paid service.
Once you have the data, you may realise that there are queries that need to be taken care of.
If we are looking at Premier League teams for instance, should you consider all matches or just their league games? It's possible to make adjustments if the team in question had players missing, or had a mid-week Champions’ League clash.
This is where you can exercise your judgement, determined by what your aim is.
Step 4: Choosing the form of your model
This is where the mathematics comes into play given there are so many models to choose from or invent.
There is a plethora of data available on the Internet, some of which is free, while some websites offer a paid service.
We have proposed a number of models in the past and they can be as complex or as simple as you wish. Our recommendation is not to overcomplicate.
This step can be interchanged with step 3 as the data may lead you to use a particular model, or a particular model may require specific data.
Step 5: Dealing with assumptions
Each model will have a number of assumptions, and you should be aware of their limitations. You may forget to do this, but it's absolutely vital.
For example a significant contributor to the financial crisis in 2007-08 was the misuse of derivatives caused by a misunderstanding of assumptions in contracts such as Collateralised Debt Obligations and Credit Default Swaps.
Previously in this article we highlighted how averages and standard deviations assume events are normally distributed. This for example would need be tested.
Step 6: Build the sports betting model
The next step is to actually build the sports betting model. There are numerous tools to use including online calculators, Excel, MatLab, Java, R programming and VBA.
You don’t have to be a wiz at programming to build a sports betting model, but the more you understand the functionality, the better equipped you will become when testing and analysing the data.
Step 7: Test the model
You don’t have to be a wiz at programming to build a sports betting model, but the more you understand the functionality, the better equipped you will become when testing and analysing the data.
It's paramount that you test the efficiency of any sports betting model to understand how sensitive it is to the results.
In any case the results of the model may lead us to reconsider any of the previous steps.
The key question as always is whether or not the model is making a profit? Therefore you’d need to test that – leading you to running through the cycle again.
How To Do Betting
Step 8: Monitor results
Write In Game Betting Meaning
Assuming that an adequate model has been built and tested, it needs to be maintained as time progresses. This leads us back to the starting point – defining future aims.
Applied knowledge
Understanding the processes involved is paramount when learning how to build a sports betting model.
Quantitative modelling isn’t just about taking a model and applying it, there are a number of processes – not necessarily in the order stated – which should be completed.
Following this process won't guarantee a profit-making model, but it will ensure you are considering the fundamental aspects that are needed to build a new sports betting model.
For an example of how to build a betting model, click here.
Dominic Cortis is a lecturer with the Department of Mathematics at The University of Leicester; and an assistant lecturer at The University of Malta. He is an associate actuary and his research focuses on sports analytics as well as financial and betting derivatives.