BetTracker should rank by ROI

[Dave Head]

I sent the following message to Justin7, asking that "contestants" in BetTracker should be ranked by Return on Investment. I thought it was such a good idea, that I decided to make it an "open" letter:

Hi Justin7,

I enjoyed your video on black-box handicapping.

Since you are with SBR, let me give you a request, and you can pass it on to whoever you think appropriate.

I see that BetTracker is coming soon. Please use Return on Investment (ROI) to rank "contestants". I understand that some people would make one lucky bet early, and sit on a 100% winning record for the rest of the season. To avoid this, impose a quota. "Contestants" must make an average of at least one bet per week to be ranked for that week.

To calculate the ROI:

for each bet, return R = money returned - money invested
for each bet, investment I = money invested

ROI = SUM(R) / SUM(I)

Other websites use a "unit" system, which is awful. Someone who bets 5,000 units per week with a 55% winning average will be ranked higher than someone who bets 100 units per week with a 60% winning average. The unit system is a good measure of who is the most compulsive gambler, not the most profitable gambler.

Thanks

[MrX]

So you're more impressed by someone going 30-20 (60%) than someone going 550-450 (55%)?

[LT Profits]

Right, units is the way to go because that is the way cappers should be judged in real life. I'd rather go 55-45 making 10 plays a day for 10 days than go 12-8 making 2 plays a day.

[Zou_fan]

Wouldn't your first gambler at 5,000 units a week at 55% be both more compulsive (though this would be open for debate) and more profitable than gambler B who hits 60% of 100 units a week? I would think that even the best of cappers would make at least some bets with a low ROI if there are few high ROI plays available. More profit and lower overall ROI would then follow.

[Dave Head]

Yes, I am more impressed with the person betting $1,000 at 60% than the person betting $1,000 at 55%. To do that, the 30-20 bettor must size his bets at almost 20 times that of the 550-450 bettor. The problem with the unit system is that it's limited to a range of 1 to 5, or 100 to 500. And, yes, increasing the size of your bet does increase the risk.

[LT Profits]

The only thing that matters is PROFIT, so units is the best method for that reason alone. Plus I use a flat percentage of bankroll on each play, so the unit size increases as the profits increase. Thus, you actually build up your bankroll faster by going 55% over 100 plays than by going 60% over 20 plays.

[LT Profits]

Also, if you are making +EV bets, volume is your friend. Their is nothing "compulsive" about that. Better to make 10 bets with a 3% edge than 2 bets with a 10% edge.

Also, the truly compulsive gambler wouldn't stay atop the leaderboard for long anyway.

[Dave Head]

Hi LT Profits,

1) Return on Investment measures profitablity which is just as important as profit, and there's no need to shout PROFIT.

2) You said "Better to make 10 bets with a 3% edge than 2 bets with a 10% edge." If we have the same size bankroll, let's say $1,000, then you bet $100 per game, and I bet $500 per game. In the long run, the person with the highest edge makes the most profit, and isn't that what you were shouting about?

3) In a unit system, on a scale of 1 to 5, your 10 bets would allow you to have a maximum "bankroll" of 50 units. My 2 bets would give me a maximum "bankroll" of only 10 units. It's not a level playing field, and not a very good way to compare results.

[durito]

How about making 10 bets with the 3% edge and the 2 with the 10% edge. Surely if you can find the last two, you can find the first 10.

[Dave Head]

Hi durito,

Here's an analogy: If one bank offers you 2% on your deposit, and another bank offers you 1%, how much should you deposit for 1%? Answer: None. Why should you invest any money for 1% when you can take it to another bank and get 2%?

[durito]

Bet limits

[MrX]

Hi durito,

Here's an analogy: If one bank offers you 2% on your deposit, and another bank offers you 1%, how much should you deposit for 1%? Answer: None. Why should you invest any money for 1% when you can take it to another bank and get 2%?

Bet limits

More importantly, putting all of your money in an investment that has a significant chance of returning zero is not so smart. The bank analogy has zero relevance to sports betting.

[Dave Head]

hi durito, MrX

Sorry it took so long to answer you. I get a little busy between Saturday and Tuesday.

I admit that the analogy was forced. Your view is probably more professional and rational. But as a recreational bettor, I have no problem walking away from a bet if it's not at a better rate. Faced with a bet limit, I'm not going to ask the book how much they'll let me bet at their second-best rate. They're not doing me any favors taking my bet. If they don't want to take all of my money, that's their problem.

[LT Profits]

Well, to maximize profits, you should really bet ALL games you have an edge on (if you want to set a minimum edge of say 3% to place a bet, I'd grant you that) and vary the best size according to the edge. So if you are only betting on edges of 10% in an attempt to maximize ROI and win %, you are actually leaving money on the table. Net profit is the most important figure because that is the real dollar amount you have won to do with as you please.

[Dave Head]

hi durito, LT Profits, and MrX

Thanks for the input guys.

[LT Profits]

hi durito, LT Profits, and MrX

Thanks for the input guys.