Being able to calculate rate of return is crucial to being a successful bettor in any game. Whether it’s online slots or blackjack, a person absolutely must know how much money they’re getting back on investments. This is especially the case with sports betting where money management is the key to success. Here’s an in-depth look at rate of return as it applies to sports betting.
What is Rate of Return?
Simply put, rate of return is how much money you can expect to get back on the cash you invest in a sports bet. For example, if you wagered $220 to win $200, your net rate of return (ROR) would be $200. Of course, this concept is a lot more useful when put into a percentage.
Calculating your Rate of Return
Putting your ROR into a percentage is not hard to accomplish. Using the aforementioned example where you bet $220 to win $200, you would divide $200 by the investment of $220. So using the formula 200/220, your rate of return would be about 91%. Finding your ROR for one wager is easy, but not very useful so it’s important to know how to come up with a rate of return for a range of bets.
Long-Term Rate of Return
It’s best to calculate your rate of return over the long-term so you can see where you stand. A great sports bettor will have a long-term ROR of around 60% (this covers the juice/vigorish and leaves plenty of money in profits).
Using a great sports bettor as our example, let’s say this gambler wins 60% out of the 100 wagers they make in a year. Assuming they bet $110 ($11,000) to win $100 ($10,000) on each game, their net winnings would be $6,000 (0.60 X $10,000); the total amount lost during the year would be $4,400 (0.40 X $11,000). This leaves the net ROR amount at $1,600.
To finalize this with a percentage, you would take the total amount won on the year ($1,600) and divide it by the total amount wagered ($11,000). Your long-term ROR would thus be 14.55% ($1,600/$11,000). |
