Statistical concepts that will help you analyze the betting tips of your punters
In this section we present the statistical concepts used in InBetsment in order to assess the quality of tipsters and forecasts:
Yield measures, in percentage, the profit in relation to the total amount bet for a determined number of bets.
For example, if a tipster places 15 bets during one month (let´s consider he applies 2 units each) and the net profit is 15 units, the yield is 15/30 = 50%.
It is of course one of the most important tipster statistical values to check, but perhaps it is overrated, since that yield is calculated taking into account the odds at time of publication. However, there are different factors that make the users sometimes bet below that odds value. This makes the real customer yield to decrease below the official one.
InBetsment has developed a term called ‘score’ that assesses all the important factors to give our tipsters a rating reflecting the quality of their service.
It is the profit or loss obtained after placing a bet. It is measured in units, like the stake.
IMPLIED PROBABILITY IN ODDS
It is possible to estimate the probability that a bookie is giving to an event to occur, through the odds.
If you want to know how odds are translated into the real probability a bookie has assigned to an event, we need first to know the pay-out percentage indicator, which indicates the profits bookies are making.
The best way to explain this is with an example:
Let’s use the match Real Betis - Valencia CF, with the following odds:
Real Betis = 1.75
Draw = 3.30
Valencia = 4.20
The profit of the bookie is calculated as follows:
Profit = (1 / 1.75) + (1 / 3.30) + (1 / 4.20) = 0.57 + 0.30 + 0.24 = 1.11
Therefore, the pay-out, or payment percentage, is:
Pay-out = (1 / E) * 100 = (1 / 1.11) * 100 = 90%
The probability assigned by the bookmaker is the inverse of the odds, multiplied by the payment percentage, namely:
Real Betis win probability = (1 / 1.75) * 90% = 51%
Draw probability = (1 / 3.30) * 90% = 27%
Valencia win probability = (1 / 4.20) * 90% = 21%
DEFINITION OF VALUE
Value refers to the odds that are overpaid, regarding to the probability of occurrence. They are bets that you can individually win or lose but in a long term, they are very profitable.
Our specialists are experts in finding value: they dominate a particular market, or sport, and are able to estimate or limit the probability of that occurrence and, therefore, estimate which odds are the best. If they find a bookie whose odds for an event are overpaid, they will publish that pick.
It is the minimum odds value to which the specialist recommends to bet. Below this value, it is recommended not to bet, considering that this forecast is worthless.
For example: Betsgrowth, premium tipster, sends a pick with odds at 2.10 and stake 2/5
The tipster determines that the threshold value is 1.90. If the user, for whatever reason, sees the pick below this value, he should dismiss the bet and ignore the forecast.
LIQUIDITY OF A PICK
We could define this as the capacity of a forecast to make a profit, without the market closing, or odds value going down.
Within the vast range of bets that bookies offer, there are huge disparities in market liquidity. The more important is a competition, the more liquidity, and vice versa.
This is one of the details that tipsters need to know, in order to offer quality picks to their customers, since when a certain amount of money enters into a market, the bookie will automatically decrease all odds related to that market. Therefore, this circumstance does not allow the rest of bettors to bet within the values advised by the tipster.
This is directly related to the duration of the odds, which is a very relevant factor when it is assumed that the official stats are the real ones that customers can get. Therefore, it is a factor that we have included in the tipster ‘Score’.
Betvalue is a statistic number that measures the expected return in the long term if you often repeat bets on similar picks. In statistical jargon it would be called “the expectation of profit”.
It is calculated as follows:
Betvalue = Odds *actual event probability
Scenario: Wimbledon Final: Nadal vs Djokovic.
A tipster sees no favourite, so the probability to win of either is 50%, which would mean that we could expect odds of around 1.9 for each player. If the bookie releases odds of 1.53 vs 2.37, the tipster will probably send the forecast for Djokovic to win.
The betvalue of that pick would be 50% * 2.37 = 1.185, which means that for each euro bet you make, on average, €1.185.
This serves as a rough estimate of yield. The yield, if we bet repeatedly to these forecasts, would Betvalue -1. In our example: 18.5%
ROI (Return Of Investment)
The ROI, or return on investment, in betting, is a financial term that refers to the profitability of the bank over a period of time. It is normally calculated yearly, ie: the profitability of your bank after a year of betting.
For example, if we start on the 1st of January with a 1,000 € bank and at the end of the year, on 31th of December, we have 3,000 €, the ROI is 300%.
The ROI of your investment in betting is directly comparable, for example, to the APR of savings accounts (usually 1% - 3%) or the profitability of an investment fund (rarely achieving values above 20%).
It is common for customers who are not familiar with betting argot to mix up ROI and yield. These are completely different terms, even though both measure performance.
The yield, as we explained above, gives the average winning percentage of a tipster per 100 units or euros bet. The ROI measures the total profit gained for every 100€ of the bank, over a period (usually a year).
1st January: bank of 1000 € and 1000 bets/year:
500 equal bets: I bet 10 € with a net profit of 15 €
500 equal bets: I bet 10 € with a net profit of -10 €
The yield will be Y = (500 bets * profit 15 € - 500 bets *profit 10 €) / (10 bets * 10 €) = 25%
ROI will be R = 2500/1000 = 250%
The turnover is not more than the volume of money wagered. That is, we refer to the turnover of the month as the volume bet in that month.
It is a little used concept but it refers to how many times the bank has bet in a period of time. For example, if you have a bank of 1000 € and in one year you have bet 4000 €, you have rotated the bank 4 times in a year.