With sports betting getting legalized around the country, the amount of information and tips related to the topic is growing all the time. Websites, TV, the sports page of your local newspaper, radio, blogs, Youtube channels, you name it. People are talking about betting on sports everywhere.
When you’re digesting all of that information, it’s important to understand the viewpoint or the approach that the source of information is taking. Because unlike us here at the ScoreMetrics Lab, not everyone out there is talking with the intention of making solid, long-term moves at the market.
Roughly generalized, there are three types people acting in the sports betting market:
- Gamblers, who make bets based on gut feeling in order to have some fun or to try to score a big long-shot win
- Handicappers, who analyze single games and make decisions based on their analysis
- Sports traders, who take a systematic approach to exploiting long-term patterns and approach the market in similar fashion that traders in the stock market do – as a long-term investment
Let’s look at the differences between all three.
Gamblers and occasional bettors act based on intuition and emotion, often betting on their favorite team to win or to score a lot. Most of the actors in the sports betting marketplace fall into this broad category, and the offerings of a sportsbook are geared towards capitalizing on these types of uninformed customers. Coincidentally, most of the information out there that you’ll be hearing is coming from the mouths of gamblers.
Besides their gut feeling, gamblers base their bets on little pieces of information they hear from talking heads on the TV or the radio (who are mostly just gamblers themselves), or on hot tips from their friends or colleagues. They are blissfully unaware of all of the relevant major and minor factors that might affect a game, and they certainly don’t have the capacity to assess whether or not the odds they are getting are good or bad.
Gamblers have a tendency of losing money in the sports betting market over the long term. They are rarely keeping a record of that, though.
Successful handicappers are informed – they carefully analyze each game and matchup they’re interested in investing in and assess whether or not the opportunity is worth it in terms of the odds or the lines that are available.
Some of the many things that handicappers take into account in their analysis include individual matchups, recent and historical performances, schedules of both teams, injuries, the stadium, the weather, the odds and the lines, and the movement of public money. Some of the best and most successful handicappers might even be developing their own complex projections models and running simulations of games.
Handicappers look to find an edge in the games they invest in in order to generate long-term profits. Successful handicapping requires a lot of time, effort and expertise.
Trading in sports (or investing in sports) is our approach in the sport betting market here at the ScoreMetrics Lab. In fact, our head trader John Todora developed the world’s first real portfolio investment method that can be used to trade sports, which is called ScoreMetrics (you might have guessed that!).
What does investing in sports actually mean? This is what we wrote in our article on sports betting as an investment:
Investing is the act of allocating capital to assets with the goal and expectation of generating a profit. Good investing involves research, risk analysis, managing capital responsibly, and diversifying investments. Successful investors follow a long-term strategy or a system that matches their goals and tolerance for risk, and they follow that system non-emotionally.
So, what’s the difference between trading or investing in sports and handicapping?
Whereas handicappers analyze single games and look for their edges there, successful sports traders follow investment systems. A sports trader has done his or her research before the start of a season and looked for profitable patterns that hold up over a long period of time.
Instead of analyzing games and matchups throughout the season, sports traders execute trades based on a predetermined set of rules for qualifying games, without exceptions.
Almost all of the articles and videos we produce here at the ScoreMetrics Lab are useful for understanding the thinking behind investing in or trading in sports, but here are some of the key ones you should look into to learn more:
Building successful sports trading systems also takes a lot of time and effort. Luckily, we’ve done a lot of the heavy lifting for you. So if you want to learn more, take advantage of all the materials we’re producing for you every week for free.
And to learn all you need to know about building winning sports trading systems, don’t forget to check out John Todora’s new book – “Zero Correlation Investing – The Score Metrics Secret”. It’s currently on sale for a limited time, so go get your copy now!
The ScoreMetrics Lab is the engine that runs the Sports Trading System operation, consisting of a team of researchers and writers who are constantly testing and retesting algorithms. They work hand in hand with our Head Trader and Creator of ScoreMetrics, John Todora to help find new breakthroughs and develop new systems.