Most People think, that profit is most important indicator of success in sports betting. But it’s not. If you want to see how good one sports handicapper is, you should pay attention on three things: Yield, ROI and Profitability. I saw a lot of sites, that don’t understand the difference. Some sites use ROI as Yield and vice versa. This is why I will try to make simple explanation with an example, so everyone can understand those three important things.
Let’s say John has 10.000 EUR and he wants to invest in sports betting (instead of somewhere else). So, he will open an online bookmakers account and he will put those 10.000 on it. For simple example, we will say, that there are no fees and he has exactly 10.000EUR on his bookmaker account. He decided, that he will divide his bankroll into 100 parts and he will bet exactly one game each day in next 365 days. Every bet size will be exactly 100 EUR. He will not touch account for next 365 days and because of that all losses and wins will return on his account.
After one year, he made 365 bets, 100 EUR each. He won 195 bets and lost 170 bets. Right now he has exactly 12.760 EUR on his account. He made +2.760 EUR in this case.
Yield will measure betting efficiency. It is profit / sum of all stakes. Profit in our example is +2.760 EUR and he made 365 bets * 100 EUR = 36.500 EUR. Yield = 2760 / 36500 = 0.07562. His yield is 7.562%. Everything around 10% is very good.
ROI (Return of investment)
The definition for calculation is something like this: for a single-period review, divide the return (net profit) by the resources that were committed (investment). In our example, John made +2.760 EUR of profit with the starting money (this is his investment, not turnover) of 10.000EUR. His ROI in this example is 2.760 / 10.000 = 27.60%. With ROI you want to see, how much you gained in some period (one year for example).
“Profitability is the ability of a business to earn a profit.” Without profitability you sports betting will not survive on the long run and is measured with profit and losses. Profitability = Profit / All Losses. For example, John played 365 games and his record was 195–170. In this case he lost 170 bets * 100 EUR = 17.000 EUR. Profitability = 2.760 / 17.000 = 0.1623 or 16.23%.
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