For many people, betting is nothing more than a fun and enjoyable pastime which they take part in on a casual basis. Others, though, involve themselves because they want to make money from the endeavour, yet numerous members of this group do not fully appreciate how difficult betting can be.
What is betting?
While it is of course helpful to have knowledge about the sport you are betting on, this is by no means enough to be successful. Indeed, it is common for individuals to know huge amounts about, for example, rugby without being able to earn money when betting on it. You could follow your chosen sport for multiple hours every day, yet that alone does not mean you will win more bets than you lose.
More important than sporting knowledge is the capacity to think probabilistically, a skill which is vital when it comes to the betting world. One could even make the argument that sporting knowledge is a barrier to success, because said knowledge has a tendency to distort judgment and decision-making.
That is not to say sporting knowledge has no part to play – far from it. However, it must be combined with other aptitudes before it can have a positive effect on your chances of turning a profit.
At its essence, betting is a test of efficiency at predicting future results. It is wrong, though, to view it simply as a two-way battle between you and the bookmaker. Indeed, the bettor is not just competing against those who set the odds, but also against fellow bettors.
At face value, the bookmaker is in the strongest position. They possess masses of information which the average punter does not. They also have more money behind them, which means they can afford to lose every now and again and can also take more risks if necessary.
Inefficiencies in a bookmaker’s prices are inevitable, but very few bettors will be able to take advantage before they are rectified. If thousands of punters back a certain outcome, the bookmaker will acknowledge the error and adjust their odds accordingly. This creates a battle between bettors to find value in the market before too many other people do.
Luck is still important
Finding value before others is not easy and requires huge investment in terms of time and energy. It is also worth remembering that you are not alone in trying to discover inefficiencies in the market which could earn you money – at the exact same time you’re researching trends and data, so are many others.
Finding an edge is therefore very difficult, and even those who do discover one must then learn how to exploit it. Doing so occasionally is not enough either: if your goal is to make regular money from betting, you will constantly be searching.
Understanding the significance of sample size is crucial if you want to be successful. Competition often provides motivation in any field, and if the overall market becomes more skilled, luck plays a bigger part in determining the winners and losers. Controlling luck, of course, is pretty much beyond everyone – good fortune is by its very nature uncontrollable – which is why it is so difficult to be successful in the long-term.
We will refer to this phenomenon as the Paradox of Skill. In this, skill is separated into two different parts: absolute skill and relative skill. It would seem intuitive that a higher level of absolute skill would be beneficial, but this is not necessarily the case. As the difference between the very best and the average levels of skill within a market decreases, the overall importance of skill does so too. Luck has a more significant part to play in such scenarios, breaking up the small boundaries between levels of skill.
It is one thing to understand the Paradox of Skill but quite another to counter it in real-world betting markets. Underestimating the role of luck can have a very negative effect on a bettor’s chances of success.
The role of psychology
Psychology is another thing that many bettors fail to grasp the importance of. There are several different biases which can affect what you bet on, when you bet, the size of your stake and plenty more. Understanding these psychological processes and why they exist will only help you as you seek to turn a profit in the betting world.
To put it in the simplest possible terms, the means are more important than the end; in other words, you should always look at the process more than the results. This, incidentally, is the same approach many sportspeople take. You may occasionally lose a match or a bet, but if your process is right you are more likely to have success in the long-term.
Even if you have a good understanding of gambler’s fallacy, probability rules, the illusion of control, the underappreciated role of luck and human beings’ tendency to prioritise avoiding losses over making gains, there are several more factors at play – more, indeed, than most people can even begin to comprehend.
Other examples include the misjudgement of probability (seen in such phenomena as the hot hand fallacy and favourite-longshot), the methods we use to process information (confirmation bias and anchoring bias) and the way in which he recall past events (availability bias and hindsight bias).
Can you discover if you’re good at betting?
Given that the aim of most full-time bettors is to make enough money to sustain themselves, there is a tendency to focus on results over process. In fact, even casual bettors fall into this trap, analysing their performance simply by looking at the profit or loss made.
These figures, though, are heavily influenced by luck, which means you could make a loss even if your process is flawless. In such a situation, a bettor may erroneously change his methods in the belief that his process must be wrong because the results are not following. This would be a mistake, so it is important – and very difficult – to become emotionally detached from the result.
The harsh truth is that you may never discover whether or not you are skilled at betting, regardless of how much profit you make. One thing is for sure, though: long-term success is more likely to come to those who are focused on process more than outcome.
This is where sample size comes into play. Those who are new to betting often place too much importance on small numbers, assuming the results from their first few wagers are a definitive judgment of their process. These bettors also fail to grasp why losses suddenly occur more often than previously.
Yet even if a bettor is able to take on board all of the above, it does not necessarily follow that they will be successful. An edge still needs to be found, which is where the hard work really begins. Trying to make a career out of betting is not worthwhile unless you are confident that you understand all of the elements covered in this article.
How to cope with the drawbacks
In this age of the internet, it is simple enough to find many betting strategies which could help you on your mission to make regular money from the endeavour. However, while research can certainly help to give you a good grounding, you are more likely to be successful if you conduct your own analyses. Remember, you are trying to find edges that others have not discovered – so those that are already publicly available will have been accounted for by bookmakers.
Even if you are able to successfully find an edge, you then need to dedicate hours and hours of your time to exploit it. You must also understand that you are likely to lose money in the short-term. Bear in mind both the financial and psychological effects this can have in the early days.
To summarise, then, it is very difficult to make a consistent profit in the betting world. However, with the right amount of knowledge, time and effort, you could be successful in the long-term.