[niming]

looking forward to the next lesson

[newguy]

Recently there was a flurry of posts from a certain poster; and some of them got me thinking about just how little many gamblers know, how that hurts them, and how a place like a casino takes advantage. Let’s start real basic, old school style.

You walk into my shop and I greet you at a table somewhere on the floor. I’m holding in my hand a bag and in that bag are 10 marbles. Exactly 7 of those marbles are red and 3 of those marbles are white. I will bet you even money that you cannot take two consecutive red marbles out of the bag. You do not return the first marble drawn before taking a second marble.

Do you take the bet? If not, as a three digit money line, what would I need to offer to change your mind?

For you veterans, those laughing at the simplicity of the task, I will always welcome, need, and want your knowledge in my threads. So for you guys, let’s take it a small step further.

At $100 per bet, and stated as a percentage, what is average long term return for this even money bet? If I offered $120 to your $100, stated as a percentage, what would that average return change to?

Let’s change the analysis. If I offered $270 dollars to your $100 that you can’t pull two consecutive red marbles out of the bag, how many of the 7 red marbles would you allow me to convert to white before you wouldn’t play the game?

And for guys breezing through, a question, maybe a bit more challenging, for you could be this…where would you place the table to greet the customer and why? And for fun, say you owned a grocery store, where in the grocery store would you place the game? Why?

So, would you take the bet?

If you are having difficulty or can’t answer the above questions, including table placement, you need to be able to, because I assure you, we winners can.

Let's see how my math works

No. Wouldn't take even money. Believe ROI is -2%. Would need +1.09 odds or better to turn it +ev for me.

2% roi is off actually I think. I got my daughter in my arms so having hard time with math but it's less than that slightly. At +120 it's +ev. Roi around 11%

At +270 I would let you convert 2 red to white. 5 of each gives me a 22% chance of winning. Which imputes to +225 so if math is right. It's +ev.

Location is tougher. If one entrance/exit I would place it near there. Get people coming and going. If multiple entrances, and I owned the store, not just table, would place near "impulse buy" product with highest margin hoping that if customer won I would get some of my losses back through margin of you buying something you otherwise might not have.

[niming]

At +270 I would let you convert 2 red to white. 5 of each gives me a 22% chance of winning. Which imputes to +225 so if math is right. It's +ev.

i don't know...

1/0.22 = 4.54 no bet

[KVB]

2% roi is off actually I think. I got my daughter in my arms so having hard time with math but it's less than that slightly. At +120 it's +ev. Roi around 11%.

I’m glad you’re attacking the ROI question, thank you. And I hope your daughter is well. A thing like expected value has a lot of interpretations, especially among the Forum. I was hoping to see some of the veterans stop by and chime in for the Forum. Let’s see a few others take a stab.

I will say this, -2% is off, for the even money bet. And, at +120, you are positive in EV, but your 11% return is far too high.

At +270 I would let you convert 2 red to white. 5 of each gives me a 22% chance of winning. Which imputes to +225 so if math is right. It's +ev.

Let’s think about this. A 22% chance of winning translates to slightly more than 1 out of every 5 tries. That means, roughly, that in 5 tries you will lose 4 of them, winning 1 bet. What would that one winning bet need pay for you to break even? Remember, you are betting $100. Does $225 seem like enough? How about $270?

…would place near "impulse buy" product with highest margin hoping that if customer won I would get some of my losses back through margin of you buying something you otherwise might not have.

Absolutely brilliant…that’s going to be a tough answer to beat. A winning sports bettor treats it like a business and knows it is about profit. Whether you are seeking more wins, or trying to shake off a few losses, the motive of profit must always be a consideration.

[KVB]

Thanks MrMattE I hope I can contribute, like I said, whether it’s helping to find more winners or get off of some losers. I think you’d be surprised how even the best subjective handicappers can lose simply because of not knowing the numbers they are betting into. I won’t even bring up money management here.

And niming…thanks for the contributions.

[niming]

I won’t even bring up money management here.

And niming…thanks for the contributions.

no need to thank me. i thank you for the thread. i like it.

but please bring up money management. it is my favorite subject as it is probably the most important ingredient that determines profit or loss for me at the end of the month. i can not use kelly. very rare i have confidence for it. i also have winning streaks and losing streaks. i am trying to bet smaller stakes when in a bad run, and it usually helps at the end of the month. the key is to be able to determine if i am in good form or bad form.

pretty amateur right?

[KVB]

For you veterans, those laughing at the simplicity of the task, I will always welcome, need, and want your knowledge in my threads. So for you guys, let’s take it a small step further.

At $100 per bet, and stated as a percentage, what is average long term return for this even money bet? If I offered $120 to your $100, stated as a percentage, what would that average return change to?

Isn’t anyone else going to take a crack at the ROI, or EV, question? C’mon veterans, you don’t have to show your work, just spit out an answer to contribute.

I started this thread because I was thinking about how little gamblers know, and how that hurts them. Some of you may have learned something.

I added the ROI question so some of you guys wouldn’t be bored, even if it was boring. Check in fellas.

[niming]

Isn’t anyone else going to take a crack at the ROI, or EV, question? C’mon veterans, you don’t have to show your work, just spit out an answer to contribute.

I started this thread because I was thinking about how little gamblers know, and how that hurts them. Some of you may have learned something.

I added the ROI question so some of you guys wouldn’t be bored, even if it was boring. Check in fellas.

i will have a look at it when i find time and energy. will have to study some formulas. they are beyond my usual tools

[KVB]

i will have a look at it when i find time and energy. will have to study some formulas. they are beyond my usual tools

Expanding your usual tools and understanding with some basics will only help you as a bettor. Along the line of what MattE was saying, and based on some responses, I wanted to present it in a simple form, and let us work through it, instead of just a look up the formula or here’s the formula now use it approach. Just learning what types of bets are good is one thing, but when you have an understanding of why bets are good or bad, it’s much, much better. It also helps when you’re trying to learn from a mistake…which is how we are designed to learn, from experience, not from lectures.

[KVB]

Alright, niming correctly figured that you will lose the marble bet about 47% of the time. Clearly, even money is just not good enough if you don’t have a 50-50 chance. But how do we know this? If you have a $100 bet, and stand to get back $200 (the even money proposition), then you break even by winning what amounts to the bet divided by the total return or $100/$200.

That’s .50 or 50%. At 50-50 you will break even by winning 50% of the time.

Now, if you get +115 odds you have a $100 bet divided by the total return (you’re bet plus the winnings) of $215…..100/215.

That’s .465 or 46.5%, call it 47%. At +115 odds, you will break even by winning about 47% of the time.

Note: When betting favorites, you can figure out what you expect to win by dividing your bet amount by the odds. A $100 bet at -135 figures to pay 100 divided by 1.35, or $74.07 (note the decimal placement on the 1.35).

Even if you’re not a math guy, when you’re judging a situation or a money line, like in baseball, ask yourself, at this price, what percentage of the time do I have to win to break even, and then calculate it, then as I always say, make notes and keep track, you might be surprised.

Question: If you were the one paying -120 to play the game, at $100 per bet, what percentage of the time would you have to win to break even?

Hint: It’s more than 50%.

[KVB]

Now let’s talk average return on investment, some call it ROI, some call it expected value or, that ever elusive, EV. It’s a measure of success, or lack thereof. It’s basically saying what, over the long term, you can expect to get for your investment. It’s an average over the long haul. In the stock world, and indeed the sports world, it can be calculated different ways (like an annual number). For our purposes let’s keep it a simple, long term average.

For a given bet, figure out what you expect to win and subtract what you expect to lose. Think about it. If you win more than you lose, your EV is positive. Losing more than you can win, EV is negative.

Remember, for the $100 marble bet, your chance winning was .4667 and your chance of losing is .5333.

We’re dealing with a return on investment, so your amount at risk is important.

A $100 bet with a .4667 chance of winning pays 100 x .4667 or $46.67. The same bet with a .5333 chance of winning pays $53.33.

Your expected value is 46.67 – 53.33 or -6.67: an expected loss of $6.67 per bet. Since we are betting $100, that’s an EV of -6.67%.

If you get +120 instead of even money, that changes the expectation. Now you expect to win $120 x .4667, or $56.00 while your expected loss stays the same at $53.33.

With a +120 payoff, your expected value is now $56.00 - $53.33 or $2.67. That’s 2.67% of your $100 risk.

A positive expectation is generally a good bet, no matter what financial market you are analyzing. One good place to play with this is in the player proposition markets. If you can roughly determine the probability of certain propositions, then calculate the EV based on the lines offered, you can see if the prop is a ‘good bet.’ Sometimes, if you check lines early, there can be very generous odds offered, and you can take advantage.

You have to be careful here. Just because you figure to win $2.67 per $100 you bet, it doesn’t mean you will win $2.67 every bet. You will lose bets too…and those ups downs can wreak havoc on the best of handicappers.

That’s for another thread and does address money management and psychology. Instead of just telling you to flat bet, and the risks of progressive betting, you will benefit when you see the evidence why, making the decision for yourself.

This isn’t crazy math, but knowing how to use numbers like this is most assuredly going to help any bettor.

As usual, keep notes and track, you’ll be surprised what you find.

[niming]

Question: If you were the one paying -120 to play the game, at $100 per bet, what percentage of the time would you have to win to break even?

54.55%

[niming]

thank you for the post on roi and ev kvb.

when keeping notes and tracking what can i find that will surprise?

i don't know what progressive betting is, i will have to look on google

[niming]

if i place a bet, win, and place all the returns (stake+profit) on another bet the probability for the second bet is independent, but psychologically it's hard to treat it that way after 5 consecutive wins. the longer the winning streak, i have the feeling that the probability for winning another bet is actually much lower than. it is wrong,but i can't get it out of my head. if you flip a coin and you get 7 heads in a row, my mind is telling me that the odds for another heads is lower than 50%. i know it is wrong, but still, after a winning streak, fear comes in before i even decide on my next bet. i am still working to get rid of this.

that's why i can't use kelly. after a winning streak i tend to lower my stakes so that i can have mental comfort, peace of mind in case of loss. after a winning streak the last thing i want is to give all the profits away quickly. mathematically i know it's not a good approach, but psychologically it works better for me, because it gives me peace of mind, even if sometimes i am missing out on more potential profits by lowering the stakes because of fear.

is there any math approach to streaks? can you give some advice about this?

[niming]

i don't know what progressive betting is, i will have to look on google

ok, i got it now. it's martingale. i think it's crazy if not even stupid. you need infinite bankroll.

[KVB]

Another wordy one…

It’s all a lesson in money management (another thread all together). First I will say that if you want to treat your sports betting like a business and you want to profit for the long haul, then, because of the mathematics involved, there is only one way to deal with your streaks, flat betting...it is the best if not the only correct way to manage money while sports betting. Now, I will say that how you arrive at your conclusions could, and mean could, change my first assertion.

There are different ways to handicap, and sometimes you can tweak a money management style based on that. But this is sophisticated. You asked me what could surprise you about tracking and taking notes…one thing it could reveal addresses this issue.

I know I’m being vague but you should understand the basics of money management and build from there.

When I say progressive betting I use the term loosely to refer to any type of jiggling of your bet size…any type. This will cost a bettor money…it’s another thread, of course.

The idea that you will lose a bet after a win streak or that you will win after a losing streak is stemmed from what’s known as The Gambler’s Fallacy. It too could be another thread. Like you said, you get heads three times in a row… you just know tails is due. But you also know each flip is independent of the other. Add a little supporting evidence in the form of winning bets, and a mental struggle ensues. This leads to all kinds of problems.

I can say this, in the sports betting world there can be a fallacy to the gambler’s fallacy, but those are treacherous waters…another thread indeed, but one I probably won’t put out to the public.

The thoughts behind betting more in a win streak, or betting less in a losing streak are noble. Plenty of subjective bettors get hot, and want to increase bets. When it works out for them, they remember, when it doesn’t they tend to forget. In the end, this type of betting invariably costs them money. The problem about streaks I touched on in another thread:

…By the way, at this point I could say something like you should bet bigger in a win streak and smaller in the losing streak. But I know better. See, I’m not sure one can really ever know when he is in the middle of a winning or losing streak. He can only know when he just had one. That is not an original idea, but one should think about it…

If we could know, I say just bet when your win streak is beginning, and don’t bet during the losing streak at all. Now that’s money management.

Anyway, to keep thinking long haul (which isn’t the only way to think) and also about a small advantage, imagine this: Betting 2% of your starting bankroll, if you could hit just 55% winners at -110 over 1000 plays, that’s 550 winners and 450 losers, you could double your bankroll.

[KVB]

@niming for me its a constant. MLB is all i really seriously bet on at the moment. (-150) on ML is my limit. anything above that usually pushes me into the RL or no bet at all.

different from game to game for me. today (posted in other threads) i had yankees and detroit.

yankees +130 would have taken anything above +120

detroit +105 wanted to take anything above +100 maybe even -106

rarely do i have a -140 bet, usually it's above -125

stakes different depending on recent form and confidence. if i am already in profits, i might increase stakes and build a streak until i lose confidence and feel i need to slow down, if i am out of form, decrease stakes. i am old school gambler, no analysis and math, i am happy if end month with profit.

I’m not saying this is you, but many bettors bet with arbitrary parameters like these, especially the “not more than -150” number. Those bettors usually look for a good underdog, one that has a better chance of winning than the odds offered. Call it a ‘live dog’. After a while, possibly years, some betters get pretty good at this. That gut feeling, maybe like you MattE, is experience that can often point the bettor into good decisions. It’s a mostly subjective approach and can have its difficulties.

Both unusual winning and unusual losing can lead to emotions that can disrupt the subconscious mind and disrupt the bettor’s ‘feel’, leading to bad decisions. Some bettors can do well with this approach, but, eventually, the ups and downs and beats of a season tend to take these guys out.

Either way, with a strong understanding of breakeven points, these bettors usually find some more expensive bets a little more attractive, increasing opportunity.

[KVB]

54.55%

[laclippers504]

Lol

[niming]

thank you for the great posts

The thoughts behind betting more in a win streak, or betting less in a losing streak are noble. Plenty of subjective bettors get hot, and want to increase bets. When it works out for them, they remember, when it doesn’t they tend to forget.

i don't want to increase bets when hot, because after 3 wins i already fear the next loss. but i always decrease stakes when on a losing streak. experience has thought me that this will save my ass from spiraling down. it has to do with the mental state, if the losses are too painful, it might seem so hard for me to get back on track that i tend to ... destroy everything... so if i avoid that worse scenario i can end up being on profit at the end of the month

Anyway, to keep thinking long haul (which isn’t the only way to think) and also about a small advantage, imagine this: Betting 2% of your starting bankroll, if you could hit just 55% winners at -110 over 1000 plays, that’s 550 winners and 450 losers, you could double your bankroll.

trying to decrease stakes in losing streaks is also a gamble but i do it because i noticed that that's how my picks do usually... clear losing and winning streaks grouped in 5,10, 15 picks. that was when i was making many picks every day. now i have from 1 to 3 but usually 1 can be enough. if i have one bet / day i would need 2.5 years to make 1000 plays. it is too much for me. and 55% winners is not that easy. i can go 12-6... but then i will probably go 8-13 or 8-14. it's total less than 52% but if i feel i am on a bad streak and decrease stakes... i will end up with profit. it happens because as soon as i have profits after a winning streak, i tend to try to save from the profits as much as possible, so i decrease stakes. it is fear, but it saves my ass sometimes. even this is luck i guess. i know i am an amateur.

maybe one day i will be a pro and bet flat stakes with a 54% win rate. but right now i am still cautios of the scenario where i self-sabotage myself. it has happened so many times in my gambling years, that even if it hasn't happened lately, i am still aware of the potential. it's like the boogeyman of my gambling life

[niming]

i know that after 4 wins the -105/-105 bet is still a 50% chance gamble... but at the same time...

if i were to bet with you that i can win 5 in a row at odds equal or above -110 what price would you give me? +2500 if i make it?

if we make that bet, and i am at my last win (after 4 wins), it is still a 50%/50%... but at the same time, winning it would complete a bet with a 4% probability. you understand my point? that's why i fear the next loss even more after i have won 4 in a row i know it's probably stupid

[KVB]

i don't want to increase bets when hot, because after 3 wins i already fear the next loss. but i always decrease stakes when on a losing streak. experience has thought me that this will save my ass from spiraling down. it has to do with the mental state, if the losses are too painful, it might seem so hard for me to get back on track that i tend to ... destroy everything... so if i avoid that worse scenario i can end up being on profit at the end of the month

trying to decrease stakes in losing streaks is also a gamble but i do it because i noticed that that's how my picks do usually... clear losing and winning streaks grouped in 5,10, 15 picks. that was when i was making many picks every day. now i have from 1 to 3 but usually 1 can be enough. if i have one bet / day i would need 2.5 years to make 1000 plays. it is too much for me. and 55% winners is not that easy. i can go 12-6... but then i will probably go 8-13 or 8-14. it's total less than 52% but if i feel i am on a bad streak and decrease stakes... i will end up with profit. it happens because as soon as i have profits after a winning streak, i tend to try to save from the profits as much as possible, so i decrease stakes. it is fear, but it saves my ass sometimes. even this is luck i guess. i know i am an amateur.

It’s crazy psychology about the winning and losing streaks and the emotions that get wrapped around them. Plenty of excellent handicappers get caught up and that’s why they end up losing. But look at the value of tracking your bets…there is much insight to be gained for each individual handicapper. You’re already seeing the value. That too is another thread.

If you understand the basic math behind those ups and downs, those wins and losses, it makes it much easier to control the emotion the surrounds it. You don’t use the math every day in handicapping, but understanding the different possible results of any stretch of games, no matter your percentage can help you keep your cool.

I won’t go into all of it here, but think of this, everyone knows that when you roll two dice once, the most likely combination to occur is going to add to 7. If you add up all the ways to make any number, there are more ways to make a 7 than any other individual number.

Now, if you were to combine the possible combinations of every number but 7, you’ll see that seven is only likely to come up a small percentage of time. The chances of getting any other number, other than 7, are much higher than just getting a 7.

Whatever your win percentage, imagine the seven as the most likely occurrence for any given set of bets, say 21 bets. You’re likely to go like 11-10 or 12-9 or 10-11, 9-12, etc. one of those is your ‘7’. But there are so many other combinations that will occur over any set of 21 bets. And some of those streaks are insane.

Keep tracking. As far as making a lot of plays, remember there are a lot of major markets out there, college and pros. The NBA alone offers a ton of opportunity.

And keep tracking. As far as being pro and sharp and grinding and all that bullshit, forget about it. Just ask yourself what your percentage is right now. If you are calling about 52% against a -110 price, then you are very close to breaking even. Your prices are better than that.

I’ve posted before that players at a breakeven stage are ready come up, ready to breakthrough. Don’t feel like the top guys have the best information so you are defeated; know that it’s how you use the information that is important.

I say again, keep tracking. What is your win percentage over your last 100 bets? And for baseball what was your average lay price? What are you making per dollar wagered? Figure out how far you are from breaking even.

If you know where you are, and of course where you want to go, it’s easier to get there.

I can tell you this much, no matter what percentage you handicap, changing your bet size will change your breakeven point, and not for the better. It is the nature of the situation. Few who gamble understand this.

All you need is a few more winners, and few less losers. And you could be there. Remember you want make money and be around for the good bets later in the season. It’s good that you want to protect those gains.

Tracking is very important, as well as understanding why you made certain bets and being able to do it again. Track, track track. This is important information, unique to you, because you created it, use it well.

[niming]