Preference For Likely Outcomes In Betting

winner signWhen most people bet, they tend to do so in order to win money. That isn’t always the case though, with some punters actually preferring winning a lot of bets over actually turning a profit in the long term. That might sound like an odd thing to say, given the assumption that winning will see a profit be generated all of its own accord, yet for the bettors that are happier when they win their bet than when they make profit, this isn’t always the case. It is all down to the manner in which bookmakers price up markets, especially with regards to the favourites in any given event.

Popular markets and the things that are most likely to win are often over-priced to such an extent that there is very little value to be gained by betting on them. Yet for those that enjoy the sensation of winning, it doesn’t matter that they’re not going to see much money come in for their bet because the winning is its own reward. Whether they bet large sums or small denominations, the point of opting for the wager in the first-place is to have a winner on their books rather than because of a specific desire to win a large figure with their bet.

So called ‘professional’ gamblers will pay more attention to the odds of a outcome rather than how likely they are to win an individual bet.  If they find a horse at 10/1 where the odds of it actually winning is 8/1 then it is worth backing.  Yes, the horse is still not likely to win that race but if they use this logic do this over time then on average when they do win it should cover their loses.  It’s all about assessing the implied odds from the bookie against the true odds of an outcome occurring – it doesn’t matter so much if the bet wins what matters is that when it does win it returns a higher rate than the true probability would dictate.

Betting To Win

Coral Betting SlipsIn virtually every instance, those that place bets are doing so in the hope that that bet will win. That goes without saying and is not a complicated psychological stance. For the majority of people, they will be hoping that they can win a decent sum of money, with the aim being to increase the amount of money that they started off with. Interestingly, that isn’t the case for all people who choose to place wagers. For some, the very act of winning is a reward in and of itself, with the same buzz achieved by winning as by turning a profit.

As a result of this, these people don’t look for the value odds as most of us are wont to do. Instead, they will seek out odds that actually have pretty poor value, knowing that they are more likely to result in them winning their bets than if they had placed a wager on an outcome with longer odds. There is no value to be found in such wagers, but that doesn’t matter to them as they aren’t interested in how much money they are going to win. It is all about seeing their bet come home, giving them pleasure in and of itself.

Imagine betting on an In-Play football match. One team is winning 2-0 and has 63% possession. The odds on them winning are 1/20, with the odds on the draw standing at 25/1 and the other team winning 70/1. Most punters would look at the two sets of odds that would see them gain a large return for minimum investment, but our group would instead look towards the odds that would see them gain the minimum return irrespective of their investment. They want to get the ‘W’ more than they want to win money, so they bet accordingly.

Bet Against The Grain

Betting OddsIf you find yourself in the trap of being averse to a loss to such an extent that you consistently have a preference for the most likely outcome over the outcome that will offer the highest odds, you will not make a profit in the long-term that is worth much of anything. A £10 bet on something with odds of 1/20 would return just 50 pence, so consistently doing that sort of betting will see you make hardly enough money to make it worth while. Indeed, every now and then even the odds-on bets end up being losers, so you might lose your stake chasing a tiny profit – only 1 in 20 of those types of bets need to lose for you to be down overall.

The better way of betting is to go against the grain, opting for something like the 25/1 on the draw or the 70/1 on the win. You can choose to place such a bet with small denominations, meaning that if you were to bet something like £1 each time you would be able to place ten bets compared to the one on the odds of of 1/20, even if you always lost. You also only need one such wager to come in to mean that you’ve already at least doubled your initial starting part, with the possibility of winning even more than that.

This doesn’t mean you should always back the outsider, it is all about relative value.  If a lot of people are backing the favourite it might end up over-priced and the other outcomes may end up under-priced as a result and this is where value can be found.  Value on exists if the chances of something actually happening are less than the odds given by a bookie.  The favourite is still likely to win but in this scenario it won’t win often enough to give a profit overall where the outsiders may win on enough occasions to give an overall profit even though most individual bets will lose.  It is very much about playing a longer game, which includes factoring in variance as well as expected value.

It is crucial to think about trying to earn a profit with your bet rather than just seeing it come in as a winner. Even so, most people suffer from loss aversion, as covered elsewhere, that means that they don’t look past the most obvious wager. They are so scared of losing that they opt for the most obvious bet in the hope that that will be a winner, irrespective of whether it is a good bet to actually win. It might sound strange to talk about ‘good bets to win’, but if a wager isn’t going to see you win much money then there’s only a limited amount of point in placing it.

Avoiding Having A Preference For The Likely Outcome

avoid spelt using letter blocksIn order to avoid falling into the trap of constantly placing bets on the most likely outcome, you have to take risks. This doesn’t mean throwing caution to the wind, rather we are talking about calculated risks.  If you take time to research and try to find a good approximation of the true odds of an outcome it will allow you to assess betting odds more objectively.  There is nothing wrong with backing something that is 100/1 if the true odds are 50/1.  Do that on enough occasions and the few winners you get will offset the majority of losers.

If you suffer from a genuine loss aversion then this will be a difficult psychological thing to overcome as you need to accept most of your individual bets will lose.  Still, whilst in general most value can be found by backing less likely outcomes where the favourite is well backed, there are instances where strong selections are under-priced too.  Backing something at 1/2 if the true odds are 1/3 makes just as much sense as backing an outsider at 10/1 that should be 8/1.  The overall point is not about the odds of the selection you pick simply whether those odds are valuable, i.e. better than chance alone would dictate.

The only way to avoid constantly opting for likely outcomes is to put your stake at risk more regularly.  You are not trying to turn a profit on an individual bet rather you are trying to turn a profit overall by following logical steps.  The more you think about the true chances of a bet winning the more critical you can be of betting odds to find value.  You need to accept that the point isn’t to win today but to win overall, this is a difficult aspect for many people to accept, consciously and subconsciously.  The exact same logic applies to all sorts of financial, economic and trading situations too.