Profitability Vs ROI Vs Yield in Sports Betting

If odds were being offered on the fact that staking on sports predates historical records, they would be reasonably short and certainly worth a wager if it was something that could possibly be determined!

Conceivably, sports betting has been around for as long as there have been competitions with winners and losers. It’s a very popular social activity and some of the earliest examples of it have been attributed to Ancient Greece. It was here that athletic competitions were held across multiple cities with spectators staking on the outcome of these along with fights.

And even so many hundreds of years later, there are still many people that think that the profit you see is the main indicator of the success of your wager. But this is not true. If you want to see how good a sports handicapper is, you need to pay attention to 3 things:

  1. Profitability
  2. Return on Investment
  3. Yield

3 simple explanations are all you need to understand the major differences between these concepts.

For example, let’s say that Jane has $10.000 that she can invest in staking instead of spending it somewhere else. So she opens an account with a reputable online bookmaker and deposits her $10.000 in it. To keep things simple, we’ll say that there are no fees and she has precisely $10.000 to wager with.

Jane then decides to divide her bankroll by 100, betting on 1 game each day over the next year. Each stake will be exactly $100 and she’ll neither deposit nor withdraw for the next 365 days, so all losses and wins will simply be returned to her account.

After 12 months have passed and Jane’s made her 365 bets of $100 each, she has $12.760 in her account. She won 195 stakes, lost 170, and has made a total of $2.760.

Profitability

Profitability can be defined as the capacity to see financial gain, and without it, your sportsbetting would come to a screeching halt! It can be expressed as Profitability = Profit / All Losses, so, as per our example, Jane staked on 365 games and ended up with a record of 195 to 170. She lost a total of $17 000. Profitability = 2 760 / 17 000 = 0.1623 or 16.23%. Anything higher than 15% is excellent.

ROI

For a single period view, divide the return by the assets committed. In our example, Jane ended up with $2.760 after starting with $10.000. Her ROI would thus be 2.760 / 10. 000 = 27.60. With ROI, you’re looking to see how much you’ve gained over a period, like the one-year in our example.

Yield

Yield measures the efficiency of betting; it is a profit/sum of all wagers. In our example, Jane ends up with $2.760 more than she started off with and has made 365 bets. Thus, $100 = $36.600. Yield = 2760/36 500 = 0.07562. Her yield is just over 7%, and anything nearing 10% is great!