This is the first out of a three-part article series, which purpose is to investigate how one can make money from sports betting and the requirements of making a living from it.

PART 1: HAVING REALISTIC EXPECTATIONS AND DIFFERENT WAYS TO MAKE MONEY FROM BETTING

SETTING REALISTIC EXPECTATIONS

If you already feel like skipping this part you are the type that would benefit the most from reading it.

First off, it is important to have realistic expectations.

As with anything in life, making money from sports betting requires time and effort.

And those looking for a get-rich-quick solution or minimal work are setting themselves up for disappointment.

Whether you have a job or are a student, things like this start as a side project.

Most of the people who work for Trademate are building their bankroll on the evenings and weekends, while working on Trademate during the daytime.

Whether you are studying, working a 9-5 job or making a living from playing poker, we think this approach makes a lot of sense.

It happens to be very compatible with value betting since that is when the majority of games are played anyway, and thus when the edges occur.

If you don’t need the money from betting to cover living expenses, it also reduces your risk as you have more legs to stand on financially.

It also enables you to reinvest any profits you make and keep building your bankroll. This, in turn, increases your turnover and potential profits.

You can keep doing it this way until you reach a point where it makes economic sense to do it full time.

DIFFERENT WAYS TO MAKE MONEY FROM SPORTS BETTING

There are 2 main ways to make a living from sports betting:

The first is being able to pick winners. Which is what 99% of all tipsters and bettors out there are trying to do, and of which probably 98.9% are failing at.

To do this successfully, you would need to specialise in a market, preferably a niche market, where the bookmakers do not have the same level of information and knowledge as you, or where they can not interpret it as well.

If you want to try and create your own odds models, this article can help you get started.

The second wayis to find value in the odds. Finding value can again be split into three groups: 1) Matched betting, 2) Arbitrage betting and 3) Value betting.

These can be ranked based on their potential risk and reward. The pros and cons of them are discussed in this article.

Also this guest post examines the pros and cons of arbitrage betting vs value betting.

At Trademate we are all about value betting as this gives the highest potential return of the 3 ways to make money.

The downside of value betting is that the risk is higher than for arbitrage and matched betting. This is because you only bet on one side of the game, the variance is higher. These articles and video explain variance.

Let’s use an example: If one takes a bet with 2.0 in odds, one can only expect to win 50% of the time. In the short run, anything can happen, e.g. losing 10 coin tosses in a row.

But over a large sample size, let’s say 10,000 tosses, the distribution of the number of heads and tails will be pretty much spot on 50/50 (the theory behind it is explained in this article and our big data analysis has shown that it has worked very well in practice for the Trademate users).

In practice, the potentially high variance nature of value betting, means that one needs to be prepared to place hundreds of bets, maybe thousands depending on the average closing edge and odds before one can expect the variance to even out.

Our interview series with Trademate users is a quick read, where you can learn from others who started out from the same point as you are at now.

One thing they all have in common is that they have hit bad swings, but made it through them.

We have had users who were breakeven at 1,500 bets, before they hit a good run and their profits soared up and past their EV line (expected value).

Before you start you should make sure that you understand the underlying principles of value betting, mainly exploiting market inefficiencies in our case.

It is not for everyone and if you decide that it is not for you, then that is ok. But then you will not be making a living from betting anytime soon.

Next, one needs to have the patience and discipline to stick with it, through both the upswings and downswings.

REDUCING VARIANCE IN VALUE BETTING

There are steps you can take to reduce the variance in value betting, such as placing on lower odds, only placing one trade per game, placing trades close to kick-off, using a proportional staking strategy such as the Kelly Criterion and limiting it to 30% of the Kelly.

Also, one should apply a max stake size. We recommend operating with 1-2% of your overall bankroll. It is possible to set it higher and also to use a higher Kelly percentage if one wants to take more risk and increase the turnover.

BOOKMAKERS LIMIT WINNING PLAYERS AND HOW TO INCREASE YOUR LIFETIME VALUE

Whether it being matched betting, arbitrage betting or value betting, the soft books do not like winning players.

To stop players from winning, bookmakers will impose stake sizing limits on them.

Without getting a solid turnover, making money from either option becomes really difficult.

How long it takes varies from bookie to bookie. There are also internal differences at the bookies.

All of this does not mean that it is not possible to extract good value from them first though!

Also, there are steps one can take to make the accounts last longer before they get limited and thus increase the lifetime value of the soft bookmakers.

A topic we have covered in multiple articles, such as:

1. Article: How to stay under the radar and avoid bookmaker limitations
2. Article: How bookmakers track your every move and how to get around it.
3. Article: How bookmakers profile winning players

At Trademate we are currently supporting 100+ soft bookmakers. Playing through all of them should take some time.

Also, because we have so many different bookmakers and also trades to choose from, the number of people who pick the same trade is not particularly high and thus each individual account lasts longer.

We also switch out a couple of bookies every few months to keep things fresh and have added 10 new bookies this year. So our overall value offered is constantly increasing.

SPORTS TRADING

Finally, what about sports trading? Traditional trading involves buying and selling assets. Sports trading involves either placing a value bet, an arbitrage or hedging a bet.

Hedging a bet is basically to turn a value bet into an arbitrage bet. The difference between arbing and hedging is that when hedging, the bets are not necessarily placed at the same time.

For example in an arbitrage you place a bet on the home, draw and away within a short period of time, e.g. 1 minute. When hedging you would first place a value bet on e.g. the home team to win.

Then you can turn it into a sure win or a sure loss by taking a bet on both the draw + away team, or an Asian Handicap bet at a later point in time.

Hedging enables you to reduce your risk, but it also reduces the potential profit. We have covered the topic of hedging a bet in this article.

READY FOR PART 2?

In the second part of the article series, we will have put some numbers on the different input factors that affect potential earnings and run some simulations.