This is article is a reprint from Pinnacle. Written by Benjamin Cronin. Read and comment on the original article.
- Do you set your own odds?
- Are you someone who trusts the market?
- Could you have the right approach but wrong execution?
- Do you only bet for entertainment?
Just like there are many different sports and markets to bet on, and many different types of bookmakers to bet with, there are also many different types of bettor. People bet in different ways and for different reasons. No matter what you bet on or why you bet, it’s still important to know what type of bettor you are. What type of bettor are you? Read on to find out.
Although there are many people that try to make a living from betting, and far fewer people that actually manage to consistently turn a profit, there are also plenty of people who aren’t too concerned with their return on investment. This is one typical distinction people tend to make between bettors; there are those that bet to make money and those that bet for fun.
Another way people tend to categorize bettors is by being “sharp” (those that know what they’re doing) and “square” (those that don’t). However, there are plenty of sub categories within these four classic types of bettor. There are also people involved in betting who don’t even bet, those that like the mathematical or psychological elements, the ones that see betting as a puzzle that they want to solve.
Bettor A: Setting your own odds
This is the classic perception of a bettor. Someone who is doing what the bookmaker does but trying to do it better. Using any relevant information and techniques to produce an accurate reflection of the probability for the outcome of an event. The hope for this bettor is that the probabilities they produce are more accurate than those produced by the bookmaker.
This type of bettor doesn’t even have to look at the odds offered by a bookmaker to calculate their own output. Instead they will have a model or approach that has been refined and tested over time to ensure it is worthwhile investing in. This will then produce its own set of odds that can be compared against the available odds. When the bettor has a higher implied probability for a given event compared to the bookmaker, this is when they have an “edge” (a bet worth making).
Using this approach to betting takes a high level of skill, a particular set of expertise, as well as a lot of determination and patience in order to achieve the desired results. It is possible to achieve success across multiple sports and different markets when modelling your own outcomes. However, bettors that fall under this category will often specialize in particular sports or markets (given it’s so hard to achieve success, it is better to focus on attacking one part of the bookmakers’ offering).
This type of bettor has had to evolve and develop along with the betting industry. As the market has become more sophisticated, the traditional “handicapper” type approach is not as common as it once was. In order to compete with the bookmakers and other bettors, the use of data, and access to it, has become imperative in modern betting.
A lot of the above talks about bettors in a singular context but of course, as with other types of bettor, these can group together and tackle betting as a collective effort. This could be simply information sharing and networking as a community, right through to setting up a syndicate with pooled funds and designated responsibilities.
Bettor B: The right idea with poor execution
This is one segment of bettors where a large proportion of the people within the category aren’t aware of it (they tend to think they are more like the type of bettor mentioned above). This is a dangerous position to be in because people think they are doing the right thing and are unlucky when they lose (or they fail to realise they’ve just been lucky when they win).
Like the above, this type of bettor does use data and they might even model the likelihood of different outcomes for a given event and be able to calculate a perceived edge. However, where they fall down is the amount of information considered within their calculations, the type of information considered and how much time is invested in testing these calculations.
This type of bettor is likely aspiring to be a professional but unfortunately, with this type of approach, that is unlikely to ever happen. Whether it’s following historical Handicap trends in the NFL or using league and team average goals to try and predict the Over/Under in a soccer match, this is the type of bettor that uses basic level analysis before placing a bet.
Bookmakers invest huge amounts of money in staff and technology to help both set and manage the odds they offer. There are also thousands upon thousands of bettors in the market with access to large data sets and expert levels of skill and experience in predictive modelling (all of which is also being fed into the bookmakers odds). To think you can identify inefficiencies in the market and beat other bettors to them, when investing only a fraction of the time and energy of others suggests you don’t have a full understanding of how betting works and what is required to win.
Bettor C: Using the market to your advantage
It’s a common misconception that you need expert knowledge of a sport in order to make money from betting. A classic story that is referenced to back this claim up is that of a trader who made money trading “green lumber” thinking it was wood painted green, when it was actually a term referring to freshly cut trees (hence the term the Green Lumber fallacy being coined by Nicholas Nassim Taleb in his book Antifragile).
The notion that knowledge of a sport isn’t a prerequisite to success from betting on it often divides the bettors. This is likely because some do need knowledge of a sport due to how they approach betting whereas others can rely on the market to provide the bulk of the information they need.
This type of bettor has faith in the fact bookmakers are able to produce efficient lines and will work backwards from there. They don’t try and compete with the bookmaker in terms of calculating the probability of outcomes in popular markets. This is because they know the bookmaker has invested considerable resources and has a constant stream of information in the form of bets to help refine these calculations across the traditional markets on major sports.
Instead, this type of bettor will take the lines from an efficient bookmaker and shop around until they find inefficiencies with other bookmakers (which often results in getting them banned or restricted). Alternatively, they will look at alternative or derivative markets at the same bookmaker that correlate to the efficient markets but where the probability for these derivatives doesn’t match up as it should.
One example of a bet this type of bettor might make is using the probability of there being over a certain number of points in an NBA game from the line set by the bookmaker, but betting on the second quarter total. No knowledge of the teams or players taking part is necessary.
The only information required is the efficient line from the bookmaker for the game total and additional data (e.g. the distribution of points across the four quarters in an NBA game) to see if the markets for the individual quarter totals correlates as it should. If it doesn’t, there is a value bet on offer for this type of bettor.
Bettor D: All for the entertainment
The aim for a lot of people is to make money from betting. For some people though, the potential winnings aren’t the be all and end all. That isn’t to say this type of bettor doesn’t enjoy the thrill of a potential win, or feel the pain of a loss. In fact, those emotions are still very much part of the reason they bet. It’s for the excitement, being involved in the event, and having “skin in the game”.
This type of bettor might know that they are unlikely to win given how little thought they put into the bets they make. They could also have little grasp of probability and may overestimate the likelihood of winning, but just aren’t too concerned with the potential financial reward.
When bets are placed for entertainment, it’s often done to add an additional layer of excitement to the viewing experience. It could be a straight bet on who wins the game, a Multiple bet to cover different games throughout the day or a prop bet based around an individual player that is competing.
The amount bet isn’t what defines a recreational bettor. It could be €0.50, €5 or €5,000 as it’s relative to the individual’s disposable income. It is likely that this type of bettor doesn’t shop around for the lowest margins to get the best possible value. They may be loyal to one bookmaker because of the brand and overall betting experience, including interacting with the website and dealing with customer service.
Important lessons for any type of bettor
It can be dangerous to think you are one type of bettor when you are in fact another. It’s also important to note that no matter what type of bettor you are, managing your money correctly is imperative. This could be using a staking strategy to optimize your bankroll if you’re betting for a living, or simply making sure you don’t spend beyond your means and only bet what you can afford
It’s also very clear that the modern betting industry is not just made up of bettors and bookmakers. There are now, more than ever, countless “tipsters” or “touts” offering their picks as a service for financial gain. Although anyone who is serious about betting knows there is little value in these services, and anyone doing it for entertainment is unlikely to spend more money for less fun, there are plenty of people in between who will use these services.
While it is unfair to say that it is never worthwhile investing in the selections provided by tipsters and touts (there may be some exceptions to the rule), as a general principle it doesn’t make sense. The market is so difficult to beat, it would be counterproductive to work so hard to be able to find an edge, only to share these secrets with others (for a fee that could be made by betting on the selections themselves).
There are millions of people that bet around the world, and it would be foolish to think that every single one of them fits neatly into one of these four categories. What is more likely is that bettors will be much closer aligned to one of these categories than the others, perhaps with a tendency to drop into one or two of the others from time to time.
