In order to draw correct conclusions about whether the betting game brings profit and evaluate investments, the bettor turns to the help of the “return of investments” criterion – or ROI.
Explanation of the ROI criterion
ROI is a financial term that is used in sports betting and illustrates the level of income and loss. The concept of “return of investments” is taken from the English language and is translated as “profit from investments”, and also means “return” and “rate of return”. The term is used both in business and when calculating the results of a betting game. The criterion has a counting formula.
How ROI is calculated in sports betting
The formula for calculating ROI takes into account the player’s finances invested on bets at the bookmaker. “Return of investments” allows you to calculate the utility of bets or, speaking in the language of business, evaluates the effectiveness of investments.
From the total winnings, we subtract the total cost of betting, divide the resulting value by the amount of bets and multiply by 100. In this calculation, the coefficients that the player bets on are not important. The only thing you need to know is the original bank and the final one. The ROI formula looks like this:
(V – Z) / Z * 100 = X% (return of investments),
V – income received (amount of winnings);
Z – costs (the sum of concluded rates).
Formula
For example, a player has $ 1,500 on his personal account at a bookmaker. In this case, the bettor makes five bets of the same amount. It turns out that each of the rates is equal to 300 dollars. Let’s say three bets won, two lost. The player’s bank by the end of the day is $1,700. It is not difficult to calculate the net profit here: (1700 – 1500 = $200). We calculate ROI:
(1700 – 1500) / 1500 * 100 = 13.3%
In this case, the player is in the black, and the “return of investments” value is positive. With an unsuccessful series in sports betting, ROI can take on a negative value. Let’s take an example based on the previous one. Suppose that with an initial pot of $1,500, the bettor has $800 left in his account:
(800 – 1500) / 1500 * 100 = -46.6%
The ROI indicator is universal for each bettor and helps to evaluate and compare the conclusion of bets in the bookmaker.
Does ROI matter when betting on sports?
Both an experienced player and a beginner want to have information about profit or loss indicators. A win/lose calculation doesn’t reflect the point because it doesn’t take into account the initial monetary contribution.
In business, there is still debate about the usefulness of ROI, but in sports betting, the indicator can be useful. When making a bet, you need to take into account the values of “return of investments”. In the short term, ROI is useless: due to the small number of bets, the criterion may give erroneous values.
Statistics show that the correct values of “return of investments” are displayed after the analysis of 600-800 concluded bets. In this case, the indicator will correctly display the picture.
On forecast sites, in the statistics of cappers, there are ROI values of 20% or more. Do not be deceived by the statistics of such forecasters, because the assessment can be made based on several dozen events. Such a small number of bets is an unreliable indicator of profit.
Conclusion
The ROI coefficient in betting is important, but it is possible to use and correctly interpret the values of the criterion only at a distance. The more bets to analyze, the more useful the indicator will be. The coefficient is calculated according to an understandable formula, so the calculation is understandable even for beginners.