Responsible Gambling

There’s nothing more thrilling than when a bet wins, but you should also bear in mind that losses are a natural part of sports betting. If you bet regularly, you won’t win every wager you place, and you should go into it expecting some variance. Even the most successful bettors, who are used to claiming large payouts, tend to go through the odd spell where they simply can’t pick a winner.

There are ways, however, to manage your play so that when you do go on a losing streak the damage to your bankroll – and your confidence – is limited.

What is Variance?

Variance is a common statistical term which relates to the spread of numbers. There is a low variance for a set of numbers which are very similar and a high variance for numbers which diverge considerably from the expected amount.

In sports betting, for example, a punter who likes to bet on even-money selections would expect to see a low variance where they win roughly half the time and lose the rest of the time.

Variance is particularly high when the sample size is small, such as at the start of a series of bets. When tossing a coin, for example, it would land on a head about 50% of the time if you tried it 1,000 times, but there is no guarantee that five of the first ten tosses would come up as heads. If you were to pick out selections at even-money odds, you may win eight out of the first ten bets, but over time this would likely even itself out (and probably fall under 50% because the odds have been set in the favour of the bookmaker).

The Impact of Variance

There is variance in poker, casino games or even on the stock markets, and those who love sports betting have to be willing to accept a high level of risk and manage their bankroll accordingly. Regardless of how skilled you are at picking out winning wagers, you will suffer the occasional loss and if you are not careful you could have all the money in your account wiped out in a short space of time.

Example

  • Fred has built his sportsbook account up to £200 as a result of some astute football bets. He then picks out five wagers ahead of Saturday’s games at close to even-money odds and decides to put £10 on each one. He wins three out of the five to boost his balance to £210 (3 x £20 - 5 x £10).
  • The following Saturday, Fred again picks out five even-money bets and puts £10 down on each one. This time, Fred does even better and wins four out of the five (4 x £20 - £5 x 10) to boost his balance to £240.
  • Fred decides the following week that as he is doing so well, he will increase his stake on each bet to £25. This time, however, he wins only one of the five bets ((1 x £50 - 5 x £25) and his balance goes down to £165.
  • The next week, Fred is determined to win back his money and splits the whole of his £165 across five bets. He loses them all and is left with no money in his account, despite being a skilled punter who had built up £200 and then won with seven of his first ten bets of the month.

The danger of underestimating or ignoring variance is that you may keep pushing the limits when you’re doing well, until a bad week or two ruins all your good work.

You must therefore anticipate that there will be lows as well as highs, and manage your bankroll in such a way that you wager only what you can afford to lose and take into account any possible negative variance. The general advice is to not make bets that will be equal to, or more than, a certain percentage of your bankroll, which gives you enough left in your funds for gambling that you can carry yourself through losing streaks.

Quick Tips for Dealing with Variance

  • Set out a budget which can cope with losing streaks.
  • Have a maximum bet, perhaps ten percent of your bankroll.
  • Only bet with money you can afford to lose.

Bankroll Management

Bankroll management, a system that is popular amongst poker players, is a financial limit that a punter imposes on themselves for a single bet or gambling session. The limit may be a strict monetary amount, or it may be a percentage of the total cash they have set aside for wagering, but the limit is not to be exceeded. Remaining within these monetary limits allows punters to account for variance so that a run of bad luck doesn’t wipe out all of the money they have put aside for gambling.

For example, you may have budgeted £50 per month for sports betting, and have set a limit for yourself of never spending more than five percent of your monthly allowance on a single wager. This means that your maximum bet will be £2.50, which minimises the risk that you will lose your entire bankroll in one go.

Many online bookmakers allow you to set your own limits when it comes to depositing money and it is important that you adhere to these limits. If you find that you may have trouble sticking to your pre-designated bankroll management strategy, you may want to take a step back and consider how you can continue to bet safely and without risking money you cannot afford to lose.