Guys who bet aren’t necessarily the same as guys who gamble. Although the line between the two is fine. In my opinion, there is a difference. That difference can be found in the level of risk you take…
In this article, you can read what, in my opinion, the difference between gambling and betting is, why shouldn’t bet on accumulators, what the favourite-longshot bias is and why the online betting world needs The Betting Field.
Defining Gambling & Betting
First of all, gambling. The accepted definition is “the activity or practice of playing at a game of chance for money or other stakes”. Sounds reasonable right? When you speak of gambling you think of a casino. You think of a game where you risk your money in the hopes to make a quick buck.
Second, betting. When people talk about betting they accept a different definition. Although the definition of betting is essentially the same: “The action of gambling money on the outcome of a race, game, or any other unpredictable event” a betting man will always say he has an edge.
Gambling vs. Betting
To understand the difference, you first have to understand why a bookie does what he does. The most basic form of what a bookie does is judging chances. When the chance is 50% that an event occurs the bookie won’t offer you odds at 1/1, but something like 21/22. This is how their basic earning model works. In theory, they will make a 5% profit on a bet like that.
Now we get to accumulators. This where the gambling gets real. When you just pick one event, you can judge the chance of that happening quite closely and see what your chances are. Especially when it concerns sports. You can avoid a lot of risk by studying up and doing your research. But that’s not what most people do.
One of the most profitable tricks a bookie has up its sleeves is the accumulator bet. What you in essence do is lower the chance of winning in return for a higher payout. You stack events on top of events to maximize your return. Or so you think.
Let’s go back to the 50/50 event. Your chance is 50% and you get paid at 21/22. If you use this event in a 4-tier accumulator, you have to win this coin toss four times in a row. That would mean that your chances of winning are 15/1 and you will get paid at roughly 13.6/1.
To put that in terms of money. If you use the accumulator and you wager €10,- and win, you will make a profit of €134.59. When you wager that same €10,- four times, separately, and win, your profit will be €9,50 + €9,50 + €9,50 + €9,50 = €38,-.
Based on the money-terms, the accumulator sounds a lot more attractive, but when we look at the math that changes. Your mathematical return without the accumulator is 10*1.95 (payout) – 10*2.00 (chance of winning) = -€0,50. So, that’s half a mathematical euro for the bookie. With the accumulator your mathematical return is 10*14.59 (payout) – 10*16.00 (chance of winning) = -€14,10.
It might be a bit hard to believe at first, but try making a couple of these calculations yourself. You will see that in theory your return in far worse with an accumulator than without.
If you ask me. This would be a good example of the difference between gambling and betting. When you start making accumulators you’re gambling. You can know all about sports, but if you look at the math and the chances of winning, you can only draw one conclusion: you’re gambling.
For me, the line between betting and gambling is the where skill becomes chance. When betting, you always have to take risk, but by doing research and understanding what you’re wagering on, you can actually make an informed decision. In my opinion, betting starts where you have the skills to judge if an outcome is undervalued or not.
The Favourite-Longshot Bias
But then the question remains. Why do people keep betting on accumulators? Or in other words. Why do people keep betting on longshots? Well, that has to do with the fact that people tend to overvalue longshots and undervalue favourites. This phenomenon is actually so common that it got its own name: the favourite-longshot bias.
This bias doesn’t directly apply to accumulators. I’ll give you that. But the principal remains the same. People see higher odds and think that they can win more, but that’s not the case.
The essence of this bias is as follows. On Horse A you get odds at 2/1 and on Horse B you get odds at 100/1. It might seem that betting on horse B is the more profitable option. If you win you get paid a lot more. But what you can’t see is that the real chance that Horse B wins might be 300/1. Which would make Horse A with, for example, a real chance of winning of 3/1 a lot better.
So, when you apply the mathematical return principal again you get the following. Horse A returns 10*3.00 – 10*4.00 = -€10,00. Horse B returns 10*101.00 – 10*301.00 = -€200,00.
There are a lot of theories on why people tend to lean towards longshots. The simplest one is, if you ask me, money. it becomes very appealing if you type in your stake of €10,00 and see that when your 7-tier accumulator is correct you get paid €500,00. Try getting that on your savings account.
A New Style of Betting
At the beginning, I mentioned The Betting Field. What you have read so far in this article forms a large part of the business case behind it. The Betting Field is a platform where you don’t wager against the house, but against each other. This idea already exists in the forms of betting exchanges and totes and such, but where it becomes different is the level of information you get.
The Betting Field offers you custom made bets on which you wager against each other. You can see how much is wagered in total and how much on each different outcome. The odds are constantly updated throughout the time the bet is open. When someone bets you will see the odds update in real time.
What this does is give you knowledge. You can see how the bet is evolving, how much is wagered and what the punters think the chances of the outcome are. In other words, you get the tools to go from gambling to betting.
Besides giving you the tools to see how the punters are acting. You also get a lot of extra info, a background story and stats to know what the subject is about.
The last thing that makes The Betting Field worth a look is the fact that it’s a startup company and therefore not tight down by a strict brand guide. You can find funny and entertaining bets that you can’t find anywhere else. For example, it hosted a bet title Louis van Gaal (Not) Giving A F#@$. It’s a bit more ballsy so to speak…
Stop Gambling & Start Betting
To conclude this article, I would like to say that I hope you learned a thing or two about how to make more profit betting. Don’t get sucked in by the appeal of a lot of money at once. Only go in when you got the info!