5 Tactics to reduce variance in sports betting

Understanding the concept of variance goes hand-in-hand with long-term success as a sports bettor. The negative periods will always be present, but these should not worry you, just as the positive periods should not distract you. No matter how sharp you are, you will lose bets you should have won. Losing streaks aren’t always an indicator of bad betting — sometimes they’re just variance at work. Variance can be deceiving if you don’t understand expected value (EV). Many bettors judge their skill by short-term results rather than the quality of their bets.

They too have structured paytables, and 1 spin can either win nothing or go as far as to trigger a bonus round and make tremendous returns. Slots that have partial payline payouts can reduce the feeling of variance, as they can produce consistently smaller wins. You won’t really feel whether you are in the profit or not without looking at your bankroll. That is, unless you suddenly trigger a bonus game that will flood you with huge winnings.

One of the most challenging aspects of betting is distinguishing between variance (or what some of us call bad luck) and a fundamentally flawed approach. Professional bettors focus on several metrics beyond simple win-loss records. Much like micro-stakes betting being great for beginners, this conservative approach serves two critical purposes.

Variance isn’t just a challenge in betting—it’s an intrinsic feature of the landscape that affects everyone from beginners to the world’s sharpest professionals. Calculating the mathematically perfect stake in every case is almost impossible. With each approach, I experienced different downsides, advantages, and limits in reducing the effect of variance. The chances of making a loss might be higher than you may have anticipated but this is fundamentally due to the relatively low number of bets per season.

While variance can be frustrating, but it is important to factor it into your gaming strategy. Especially if you are looking at the bigger picture, and want to build your bankroll in the long run. Before playing your game of preference, you must create a bankroll that can handle a good amount of variance.

Now, let’s get familiar with the term; ‘law of large numbers’. My goal is to become a better sports handicapper and convey any information I come across here, at CoreSportsBetting.com. Because variance is unavoidable, the goal is to manage it – not eliminate it. Tracking your results is essential to separate variance from a flawed system. Conversely, if you assume you’re a genius after a hot streak, you might get sloppy and give it all back. The resulting recommended bet fraction is 0.055, or 5.5% of your bankroll.

Whether you throw it 10 times or 1000 times, the probability of getting an end result close to 50/50 differs significantly. This site is strictly for educational and informational purposes only and does not involve any real-money betting. If you or someone you know has a gambling problem and wants help, call GAMBLER.

• Variance provides a statistical framework for quantifying and understanding the impact of randomness on outcomes.
• Let’s say you play straight numbers in roulette, with a chance of 1 in 37 to win.
• For example, a 55% bettor is expected to go on an eight-bet (or more) losing streak once every 350 bets.
• If you feel gambling is becoming a problem, seek help from organizations such as Gamblers Anonymous or BeGambleAware.
• Start your free month of Portfolio EV today and elevate your betting strategy.

Equally, however, it would be a mistake to become over-confident or increase stakes over a short run of positive results. The chart below illustrates how when your value / edge increases, the chance of certain drawdowns becomes less and less. With this simulation, you can expect a return of between -12 points and +20 points, 90% of the time.

This does not mean we should stay away from high odds, IF they offer a very good expected return. To lower our variance we can intentionally stay away from the higher odds and focus on higher probability plays. In several sports we can also use markets that offer handicap betting, instead of playing on the straight lines. That way we can utilize the found value on a certain object, but lower the variance of the bet.

The hope is that there will be some variance during your session, and for it to work in your favor. You may experience fluctuations in your bankroll during gameplay, but it is important to stick to the plan. When you plan for variance, you are planning for both winning and losing streaks.

📈 Dealing With Variance

So, 70% of you will have been very happy with your 250 Positive EV bets, but there is also an unfortunate 25% of you that will have lost money. That is how variance works, and in the 25% case, a horrible stretch of bad variance. That still doesn’t mean that betting on heads was a mistake, it just means that you had horrible luck. Now, let’s pretend that you are flipping a weighted coin, that is actually weighted toward heads and lands at a 52% rate toward heads, and only 48% on tails. You are the only person that knows this, though, the person you are placing a bet with still thinks it’s 50/50. This is called variance, which is one of the most important concepts in sports betting to understand.

You can hit a cold streak where every bad break (a fumble here, a referee’s bad call there) goes against you. Kelly betting is based on the Kelly criterion, a formula used for calculating optimal bet size to maximize growth. There are many online tools for this, but the math is simple enough that you can make the calculations yourself. There are many peaks and valleys, indicating both winning and losing streaks. And he ended up blowing his fortune like he had amassed it – gambling.

How to Handle Losing Streaks in Betting

Before we move on, it should be highlighted that variance can also be lowered by other means than just the directly impactful ones. Bonuses and offers from bookmakers are a great example of this, as they simply give you https://officialpinup.com/ more room for error. Variance also increases when you raise your stakes, since each outcome carries more weight against your bankroll. You can see in this, the massive variance (noted by the peaks and valleys of the graph) that while it does maintain a semi-upward move, that you will experience a lot more pain along the way.

When you play more outcomes, then the anomalies and variance should balance out, and theoretically, the ball should land on red nearly 50% of the time. The Monte Carlo method uses hundreds of thousands of simulations to determine the odds, and frequency of winning. The more outcomes you have to analyse your results from, the closer they will be to the theoretical odds.

In statistics, variance measures how spread out a dataset is — the average distance of each data point from the mean. High variance means results are widely dispersed; low variance means they cluster closer to the average. Here are some OddsJam customer testimonials to show real-life examples of how variance works, but in the long run everything should still end up positive.

Sports Betting Variance Explained: How to Handle Losing Streaks

These odds mean a bigger statistical chance of winning and a potentially shorter losing period. An easy way to understand the concept is to imagine a coin toss, where everything is fair and even, meaning a 50% chance of either heads or tails. We have placed a bet of €100 on heads, for the great odds of 2.5. This bet would have an amazing expected profit of €75 each time the coin is tossed. If we imagine this bet being played 10 times, we can expect a profit, but it’s not guaranteed by any means. An optimal budget is one that can sustain a good long gaming session.

Do not double or triple bet on the same outcome even if EV has increased since your original bet if you want to minimise variance. However if the market changes and you are now offered +EV on the opposite side of the outcome then it is recommended you take the bet as naturally the two sides are inversely correlated. Whenever I speak to bettors who are just starting, whether that be with our software or not, I always tell them to keep their betting odds range low.

A betting outcome with high odds has a lower statistical chance of winning, so based on simple statistics, the variance the unpredictability will also be higher. In sports betting terms, long-term expectation is what matters for profitability. The best sports bettors in the world only win on about 55% of their bets (give or take). That’s a mighty good win rate, but notice it’s far from 100% – it means even the pros lose 45 out of 100 bets on average. Variance refers to the statistical measure of the dispersion of bet returns from their expected value.

For instance, you might call heads every time a coin is thrown but it repeatedly lands on tails ten times in a row. For example, a 55% bettor is expected to go on an eight-bet (or more) losing streak once every 350 bets. A higher standard deviation means results will be more volatile, while a lower standard deviation means outcomes will be closer to expectation in smaller sample sizes. Now, if you were to flip the coin a million times, the number of heads and tails would be much closer to the expected 50% each, because over a large number of flips, the variance decreases. We know that the bigger the value / edge, there is an increased chance that you will overcome more quickly a run of bad luck.

I am not telling you not to enjoy the moment, and also take pride in the hard work behind the positive results. Overconfidence in the form of increasing bet sizing, betting without enough research, or any other pitfalls can get you destroyed real fast when the pendulum swings the other way around. Stick to your strategy, keep calm and work towards the end goal – long term profitability. To further understand the impact variance has on our sports betting results, we will now look at more simulations. This time not in the view of hot/cold streaks, but in form of a realistic betting period, and the overall effect.