How to make money with sports betting
Apparently 4.2 billion people bet on sports at least once a year. It would be hard to get a number for what percentage of those people are in profit overall but it is probably pretty low. The number who are in profit but not due to sheer luck is even lower still. This article will take a look at some of the methods used by those who consistently make profit over the long term.
There are many people who claim to be profitable in sports betting through winning accumulators/parlays or by using their “systems” like “always bet on home teams which begin with B”. Anything like this is not a profitable betting strategy in the long term. Accumulators/parlays are especially bad because you pay the overround/vig on every selection so the true probability of winning the bet is far lower than the probability implied by the odds.
Value Betting
This brings us on to the key concept of being profitable with sports betting: Value. Value (or, more formally, positive expected value) is when the probability of winning the bet implied by the odds is greater than the true probability. If you placed a bet at evens/2.0/+100 (50% chance), the true probability of the bet winning must be more than 50%. If the real probability is 51%, your yield in the long term is 2%. Small edges make a big impact on your profitability. Equally, if we assume a game is 50/50 and your betting venue of choice is offering the odds on both teams at 1.9/-111, you have a yield of -5% in the long term. This is why it is important that you are getting the best odds on your selection, regardless of the underlying value of your bet. If you bet at Purebet, you can be sure your bet is placed at the best possible odds available on any blockchain betting platform.
Value betting is the main way that people make money from sports betting and it has the most nuance but there are other methods which fit different risk profiles and skills which will be discussed later. As the name implies, value bettors aim to place bets where the true probability of winning is greater than the odds imply. There are many ways to achieve this.
One way would be to develop a mathematical model to estimate the true probability of the outcome of sporting markets. This model would need to work better than the bookmakers’ pricing model, as well as be better than the market movements that come after the initial prices. This is not an easy thing to develop, but it is certainly possible for someone who has some maths background. The easiest way to do this would be to target betting against odds very soon after they are available. It is at this point that they are most likely to have the most edge. The model could be based on team stats, player stats, closing odds of previous games, over or under performance compared to average/expected, or a combination of any/all of the above. These types of value bettors tend to have a smaller edge per bet but a much higher turnover in a year. This means the yield per bet is low but the high volume makes up for that to boost the overall profit.
Another way to achieve value would be to find and evaluate information that has not yet been priced in. This is less common in American sports where any injured or missing players are known in advance and bookies suspend betting if major news is announced. However in European sports where lesser followed leagues are more common, it is very common that breaking news, or even previously known information is not considered in the odds. This is because European bookmakers tend to rely on automated pricing algorithms to price a very large number of games. As discussed in a previous article , they have no need to be accurate with their prices since they would just ban players who they think would make a profit over the long term. Methods for getting information could be as simple as following twitter accounts of teams in a league and people who report on it and talk about it; researching latest news articles, team websites, and fan forums for the most up to date information and opinions; or having insider sources in teams and a network of people who share their information. The next step is evaluating the information you find. This is the part that takes knowledge and experience. How much does the probability of a team winning change if they are missing their top scorer? What if they were already major underdogs to start with? These are things you must learn over time.
Information value betting is the most common method used. The second most common is likely what could be called domain expert betting. This involves a bettor becoming incredibly knowledgeable about a niche market. This could be the Estonian Premier League, or Baltic basketball, English non-league football. Very good bettors could focus on more popular leagues like French Ligue 2 or MLS. These larger leagues have the advantage of larger bet limits and more availability, but this comes at the cost of more accurate prices and lower edge per bet. It is important to bet at the best odds to increase this edge. (Purebet always has the best on-chain odds, by the way. Did I mention that already?) This type of bettor may focus on collecting stats and news to develop pricing which is more accurate than the current odds, or they may focus on live betting and having an understanding of team set ups, player impacts, and judging how good or bad teams are playing as they watch the game.
Similar to this but slightly different, there is something to be said about just watching games. If a bettor has a very good understanding of a sport and a reasonable understanding of (live) betting, it is possible they could spend all day watching live streams of random games and could become profitable in the long term. They would learn quickly that different leagues have different styles and tempos, but that is part of becoming an expert. If sports betting was easy, everyone would do it.
Trading
Much like in crypto markets, trading in sports betting involves longing (backing) or shorting (laying) an outcome, then doing the opposite to close out the position. Trading takes place on a betting exchange, mainly Betfair. This is the same as the base layer of Purebet, where the venue takes no risk and all bets are matched with opposing bets from another user. I talk about this in more detail in a previous article. Since the bets must agree on a price to match, a liquid market likely has very low overround/vig. Since venue fees are calculated only on overall market profit, bettors do not pay any “costs” for each leg of a trade (unlike with betting at a bookmaker where the “cost” is the vig and is paid every time a bet is placed).
The most popular sport for pure trading is horse racing. Here, traders likely scalp or swing trade the odds of horses in the hours and minutes leading up to a race starting. They will bet thousands on (or against) a horse to win, then close the trade by doing the opposite at some point before the race starts. They could do this multiple times or on multiple horses with no extra “cost”. Right before the race starts, they close out all of their positions so they have equal profit on every horse. This means that no matter which horse wins, they have profit. They have no opinion on the actual outcome of the race — they are just trading the price movements before it. Since the fees are paid only on the market profit, they only pay the fee on the profit on the one horse that actually won. There is no leverage available on traditional exchanges since the exchange has no way to liquidate losing positions during a race (as discussed in a previous article).
Tennis and cricket are also popular sports on exchanges. These are traded live, as the traders watch the game. Tennis is popular because of the non-linear scoring system and its tendency for momentum to swing from one player to another. A player only needs to win a few points for their odds to change significantly. If you backed them on at big odds and they shorten, you are likely going to want to take some profit or hedge some risk, since they can drift out as quickly as they shortened. Cricket is also popular due to the scoring system and on-field dynamics. (If you don’t know much about cricket, one team tries to set the best score possible while the other tries to get them out. Once they swap, the other team tries to chase down and beat that score.) Players are always swapping in and out of bowling duties as well as batters having different styles. This leads to on-field matchups which can be interesting and present an edge to an informed trader. He might bet on the team he thinks has the advantage for that short period of time. If it goes in his favour, he can trade out for a nice profit. If things did not go so well, he can trade out for a loss and try again next time he sees an edge. This concept can also be applied to other sports but these two lend themselves best to it.
Another “sport” which is popular on betfair is politics. The US Presidential Election market is one of the biggest individual markets every 4 years. Last year it did over £1bn in volume. Traders take positions as they expect candidates/parties to shorten or drift based on the latest polling data. To profit on politics, bettors need good data analysis skills, an understanding of politics, and polling methodology, and not to be emotionally invested in the politics itself.
Arbitrage
Arbitrage betting is similar to arbitrage in crypto trading or traditional markets. Bettors will be on one outcome at one venue, and the opposite outcome at another, at such odds that they make a small profit no matter what outcome wins. Due to the overround/vig at each venue, this is a fairly rare occurrence (since your odds need to overcome the vig twice). It is most likely to happen when new information is injected into the market but one venue is slow to react. However, in this case, you are taking one +EV bet and one -EV bet so you might as well have taken just the +EV bet and hoped it won. There are services out there that alert you to when these opportunities arise but to make it worth your time, you need to have an account with every bookmaker possible (and avoid having them closed), as well as lots of free time to bet whenever they occur. With the time, effort, and resources that it can take, it is usually better to learn some value betting methods.
One exception to this would be matched betting. This is a form of arbitrage betting which takes advantage of sportsbook new customer offers and free bets. Since your bet came at no cost to you, a true arbitrage opportunity is not necessary to make money. You simply want to take opposing sides with the lowest effective vig possible. (Best on-chain odds will be with Purebet btw.) The overall yield on this is not large and the number of free bets you can obtain is limited so it is not a long term strategy, but it can be good for new bettors to make some early profit to use in the future.
Again, I hope you have learned something from this article. If you have any questions or queries join me in the Purebet discord and let me know. This article was originally published on October 22nd, 2022.
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