ROI (Return on Investment) in sport bets
ROI is a term used by sports betting professionals to illustrate the net profit as a percentage of the initial bankroll. It is an abbreviation of Return on Investment.
Striving to achieve a good ROI is at the heart of betting. But when can a return be called good?!
In the world of betting, 4% to 8% is a steady growth of the balance sheet in the long run.
Formula for calculating ROI
To find ROI you need two quantities – starting capital and profit. A similar calculation is done at the end of a season or year to establish the bettor’s chance of sport event predictions.
The net profit from the bets is divided by the bank and the resulting number is multiplied by 100 to form the percentages.
ROI = (Net Revenue / Starting Bank) * 100
If £100 has been deposited and the balance has reached £130, it follows that the net profit is £30. This is divided by the capital of £100 and then multiplied by 100 to give a 30% ROI.
Make sure to be informed with the Plus and Minus in the odds in order to achieve higher ROI.
An example of a good ROI for betting
The above example refers to a short-term investment that brought quick success. But when calculating the return, we need to specify a larger time period – 1 month, 6 months or a year.
4% to 10% is the average ROI of proven tipsters, with the proviso that most start with bigger banks.
Assuming a starting capital of £10,000, to achieve a good ROI of 5%, a net £500 must be earned.
With an investment of £1,000 and a current balance of £1,100 – the return equates to 10%.
How to achieve a good ROI in sports betting
Unlike fixed interest rates on bank deposits, the return on sports betting is not strictly regulated. You are likely to achieve over 100% ROI if:
- You follow bank management tips;
- You don’t add a lot of selections in parlay bets;
- You follow hedging and risk mitigation strategies.
For example, an initial capital of £100 can be turned into a balance equivalent to £1,000, put another way – that’s a 900% ROI. But such values are reached by taking more risks and frequent bets, which is not advisable.
Another indicator of ROI is called Yield. It is calculated by the formula.
Most tipsters prefer Yield over ROI because it takes into account turnover, not bankroll.