Sports betting is essentially an investment. This means there are elements of risk vs reward involved. You need to research how the ‘market’ of sports betting works so you can take calculated risks which are more likely to pay off. Otherwise, you could end up making a poor investment and losing a lot of money. One important thing to learn about is variance in sports betting. The concept of variance can be confusing and intimidating for some, so in this article, we’re hoping to break it down for you. Read on if you’d like to improve your chances of getting a return on your investment in sports betting.
What Is Variance?
Variance is generally used in mathematics for calculating probability, but people have also started using it for sports betting to improve their chances of making a profit. Simply put, the variance is how much numbers deviate from the average. High variance means that they will deviate massively from the average, whereas low variance means they will deviate very little. The higher the variance, the higher the risk you take when sports betting.
Let’s look at an example to help explain what we mean. If you were to pick a playing card, there is a 50/50 chance that it will be either black or red. However, this statistic is only a probability. In reality, out of 100, you could end up picking a black card 65 times and a red card 35 times. In this small sample, the variance is high and so the average 50/50 chance isn’t accurate. However, if you were to conduct this experiment on a much larger scale, you would find the probability to be overall closer to a 50/50 chance. Therefore, the variance is lower in a larger sample size.
How Does This Relate to Sports Betting?
You can apply the above example to sports betting. Many bettors become disheartened because they’ve made one or two gambles which haven’t paid off, or they become overconfident because they’ve had a winning streak with their first three gambles. Either way, this could lead to their downfall. They’re betting on a small sample where the variance is high. If you want to sustain your sports betting and be successful at it, then what you need to do is start betting on a large sample. The larger the sample, the less variance, and the more accurate the average is.
How Can I Use This to My Advantage?
We recommend you distribute your bankroll over a whole range of bets instead of just a couple. This way, you’re more likely to have a balance of wins and losses which won’t diminish your bankroll. For example, you could place multiple bets on the same game (just remember the more bets, the lower your bet size should be), especially if the probability is high in this game.
It’s impossible to control variances in sports betting. However, if you have a greater understanding of them, you’re better equipped to reduce them. Strategize your bankroll around variances and you can ensure a return in investment. The key is to avoid making large bets on a small sample with high variances.