Betting Experts Answer: How to determine whether betting results are based on luck or skill? | Part 1

Welcome to the third article in our series: “Betting Experts Answer The Industries Biggest Questions.”

Over a small number of bets, luck can play a huge role in your betting success. Which is why it’s important to not just base your success on whether a bet won or lost, but to look further at other metrics. So, for question three, we asked the experts:

Q3: How do you determine whether your betting results were caused by skill or luck?

Check out Part 2 of our answers here, where we get the opinions of football betting analyst - Mark O’Haire, tipster verification site - Smart Betting Club, founder of Punter2Pro, author - True Poker Joe and professional sports bettor - Jonas Gjelstad.

Check out Part 3 of our answers here, where we get the opinions of betting analyst - Joseph Buchdahl, sports analyst - Dan Weston, football manager profiler - Mike Holden, Smart Sports Trader - Ryan Bruno and betting blog - The Church of Betting.

MATTHEW TRENHAILE - FORMER ODDS COMPILER

This can be answered mathematically and has been researched extensively by Joseph Buchdahl (presumably others as well) and you can even find a spreadsheet on his site to test historical betting records. You can even test a betting record against the odds just prior to an event starting rather than the actual results, to try and remove some of the noise and allow for using a smaller sample. Ultimately for full confidence you will still need a large sample and past performance is no guarantee of future returns as the finance industry is fond of saying.

inside betting

All betting must be embarked upon with a degree of uncertainty and the key thing is to be able to sanity check your own performance as you go. This requires you to have a good sense of what your expected benchmark could be for your strategy. A very simple rule of thumb is to look at the margin applied by a bookmaker to a market.

The smaller the margin, generally the more efficient the market and the higher the bookmaker confidence. You should expect to be able to beat a market that is routinely bet to 102% by a far smaller margin than one bet to 110% even if that seems counter intuitive. You may find less value bets at 110% but the margin for error is often far larger than can be accommodated by the additional margin added by the bookmaker.

Simply, by taking 50% off the margin applied by the bookmaker you already get an indication of what might be reasonably attainable by a profitable strategy. Betting NFL Spreads at 105% means I would be happy to hit 2.5% return on investment but wary if I was hitting 10% even over seemingly many bets. The flip side is that if I am losing at 10% while still taking the best odds available I am likely to be running pretty cold over the same sample.

Once you have reasonable expectations you can then set reasonable boundaries for over an under performance. This will then lead you to ask yourself if it is skill or luck and being brave enough and knowing when to ask yourself that question is key. It is no good knowing the solution without knowing when to ask the question.

Check out Matthew’s podcast ‘Inside Betting’ here.

SPANKY - PRO SPORTS BETTOR & HOST OF BE BETTER BETTORS

For me laying a bad number is worse than losing a bet. Beating the closing line is everything. If you beat the closing line long term, you will be a winner long term. PERIOD.

Follow @Spanky on Twitter & check out the article The Ringer wrote about him here.

JAKE - HOST OF THE BUSINESS OF BETTING PODCAST

From a technical point of view, many can elucidate the best ways to evaluate this better than I can but more broadly speaking I think it is important to recognise that you can be very skillful, however at the same time your betting results are caused by luck.

You need to be vigilant about the scrutiny you place on your results with a decent starting point being a cautious inspection of past performance with knowledge that only a tiny % of people will be able to have skill drive winning long term. It may be wise to have the burden of proof rest on the skill side (in other words, start with the assumption that it is luck and set a relatively high threshold to reach, in order to prove that skill is the dominant factor).

Follow@BettingPod on Twitter & check out The Business of Betting Podcast here.

STEVE - OWNER OF DAILY25

I’ll defer to Joseph Buchdahl’s answer here as I’m sure he will be able to explain it much better, so go and read that. Read Joseph’s answer in Part 3 here.

The answer is a P-value test. But you need at least 1,000 bets and likely more if betting at higher odds before the test can give you a valid result.

The problem is that by the time you know if it’s skill or luck, your edge may have disappeared. So this test can really only tell you if your past results were skill/luck.

Follow @Day25 on Twitter & check out the Daily25 blog here.

ALEX ONG - FOOTBALL, FOREX & STOCKS TRADER

This is a great question! I think first of all we need to understand the difference between luck and skill, or my take on it at least.

Luck to me is something that is fleeting in nature, it is temporary and it is not intentional. Because of this it is also not repeatable, so it is not something that a person can build a structure around.

Skill is the opposite. It is something that is hopefully permanent, it is intentional and it is something that is repeatable, so one can indeed build a structure around utilising the skill.

Now when it comes to betting results I think that we have to understand it will be a combination of luck and skill. In the short term, there is no way to know which bet is going to result in a profit, each individual, isolated bet can be a winner or a loser. It takes absolutely no skill to put on a single winning bet, and it is not a reflection of your skill level. It is the same if you end up losing a bet, so your short term results will almost always have an element of luck weaved in.

The long term results however, are far more weighted towards your skill level rather than how lucky you are. You cannot sustain luck over a career. So if you experience net profitable betting results over a large sample size of trades while following a strategy or structure, it is almost certainly down to your skill and not how lucky you are.

So to come back to the original question, you determine that your results are down to skill and not luck, by the period in which the results are derived. Short term will be more weighted towards luck and long term, a reflection of your skill.

Subscribe to Alex’s YouTube channel here & check out the Alex Ong website here.


Check out Part 2 of our answers here, where we get the opinions of football betting analyst - Mark O’Haire, tipster verification site - Smart Betting Club, founder of Punter2Pro, author - True Poker Joe and professional sports bettor - Jonas Gjelstad.

Check out Part 3 of our answers here, where we get the opinions of betting analyst - Joseph Buchdahl, sports analyst - Dan Weston, football manager profiler - Mike Holden, Smart Sports Trader - Ryan Bruno and betting blog - The Church of Betting.

Love getting the opinions from experts in the betting industry? Then subscribe to the Trademate Sports Podcast, where interview the most important people in the sports betting industry.

Here are the other questions we got our industry experts to answer:

  • Q1: Top 3 tips for betting beginners? Part 1 & Part 2.
  • Q2: How do you define “finding value” in betting markets? Part 1 & Part 2.
  • Q4: Kelly criterion or flat staking: Which stake sizing strategy do you consider to be the best and why? Part 1, Part 2 & Part 3.
  • Q5: What is the best method to use to make money from sports betting? Part 1 & Part 2.
  • Q6: How difficult is it to beat the sports betting markets? How efficient are the odds? Part 1, Part 2 & Part 3.
  • Q7: Best way to manage risk in sports betting? Part 1 & Part 2.
  • Q8: Is there a best sport to bet on? If so, what is it? Part 1, Part 2 & Part 3.
  • Q9: Assuming you have an edge, at what point can you start accurately evaluating your results and say that variance has played out? Part 1 & Part 2.
  • Q10: What is the one thing you would like to see change in the gambling industry? Part 1 & Part 2.
  • Q11: Do you think emotions play a part in people's sports betting results? If so, how should they overcome this? Part 1 & Part 2.
  • Q12: What are the top 3 mistakes people make when betting? Part 1, Part 2 & Part 3.

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