98% of betters lose money. Why?

There are essentially four categories of gamblers.

1. The Pro

Only 2% of gamblers actually make a profit from their betting. What sets them apart is they approach their betting like a business. They are cool-headed, disciplined and devote a great deal of time and effort to finding value. They keep meticulous records of all their bets and refine their strategy over time.

2. The Recreational Gambler

The Recreational Gambler sees betting as a bit of fun, something they do occasionally. It adds a bit of interest to the match they’re watching or for a bit of banter with their mates down the pub.  They don’t spend much time studying form or stats.  They don’t really expect to make a profit from it and that’s fine with them. Getting the odd win now and then keeps them happy. Losing a fiver here or a tenner there isn’t a problem – its disposable income.

3. The Addict

Gambling is like a drug for this type of gambler. Its the thrill, the rush – always looking for the next opportunity to gamble. The next bet is always going to be the big winner. They gamble in a scatter-gun way, randomly and compulsively. It’s unlikely they will ever make a profit from betting. If they did it would be pure luck and short lived. The phrase “when the fun stops, stop” was made for this group. For this group it would be best to stop gambling altogether and seek help

4. The Apprentice

These are punters who understand most of the basics around gambling – particularly the importance of overcoming the bookies over-round and the concept of “value”. With the right attitude and by applying themselves they could become profitable betters but at the moment there are things holding them back and tripping them up. It is on this group that we want to focus our attention now.

Apprentice to PRO

For those in the “Apprentice” group, there are some classic mistakes they tend to make that prevent them making money. Learning to spot them and to avoid repeating them is the key to moving out of the Apprentice group and into the Pro group.

Mistake #1: Jumping from tipster to tipster

This is one of the most fundamental mistakes. An expert or tipster might help them become a better gambler but rather than picking a tipster (or group of tipsters) and sticking with them, they hop about from one tipster to another. They take an incredibly short-term approach. After a losing week or month they give up on each one as soon as it hits a losing streak. This means they are consistently losing money. They never stay long enough with a tipster to see it succeed in the long term.

This sort of mentality is very damaging and is a huge obstacle to becoming profitable. They are psychologically unable to deal with losing runs and without changing their mindset to a more long-term one are unlikely to ever make money from betting.

Mistake #2. Falling for the “Get Rich Quick” scheme

The bettor who is looking to “get rich quick” gets drawn in by rags-to-riches stories of flash cars, exotic holidays and dream life-styles. Sales pages promoting “phenomenally successful” betting systems, tipsters with over 90% strike rates, and web sites that guarantee making a profit.

These betting systems almost always turn out to be fake and not only has the buyer had to fork out for the system, but they have lost a fair amount of cash following it too.

Unfortunately, just like the person who jumps from tipster to tipster, there are sadly some who will get roped in again and again by yet another “astonishing” system that makes all the same fake promises of untold riches.

Mistake #3: Not having a big enough Betting Bank

This is perhaps the most common mistake the aspiring gambler makes. Having discovered a promising strategy, they don’t allocate a big enough betting bank to following it. They stake far too much money on each bet and don’t leave enough in the bank to withstand the losing runs.

There will inevitably be losing weeks and months. This could either wipe them out completely or they get so disheartened they give up on the strategy, even if it was a long-term winning one.

If they had started with a more sensible betting bank, used smaller stakes and actively managed their betting bank they would have been able to withstand the losing runs and enjoy the long-term profits that would ensue.

Mistake #4: Not Keeping Records

Its human nature to remember the good times and block out the bad times. Trusting on memory alone can lead to self-delusion at times – remembering the wins and forgetting the losses. Without a full and factual record of all your bets there is no way to track your overall profit or loss and no way to figure out how you can improve.

Mistake #5: Not Spreading Risk

No matter how good a tipster is they will always have their ups and downs. Putting all your eggs in one basket and following just one tipster is risky.

In the stock market world investors don’t just put all their money into buying shares of one company. They buy shares in different companies in different markets. Some will be high-risk/high-return some will be low-risk/low-return. They build a “diversified portfolio” to even out the ups-and-downs of the individual shares but still make a profit over time. It pays to do the same with tipsters.

Picking a portfolio of tipsters and allocating a suitable bank to each of them can help to spread the risk and allow for the ups and downs of individual tipsters to be smoothed out across the portfolio.

Getting It Right

These are five of the most common mistakes that gamblers make that stop them making a profit. There are of course many others.

We can turn these common mistakes into best practices.

  • Do your research before choosing a tipster. Have they shown an overall profit over at least 6 months. Profits have been good and loses have been relatively small
  • Don’t dump and jump. Don’t give up as soon as you hit a losing run. Give a tipster at least 3 months to prove their worth
  • Avoid big bold sales claims promising you fantastic returns. The old phrase “if it seems too good to be true it probably is” contains a lot of wisdom.
  • Make sure you have a big enough betting bank. If you have a suitable bank it will make it a lot less stressful to follow the tipster and those draw-downs will be much more bearable. A rule of thumb is look at the advised betting bank and then double it – that will probably be more appropriate
  • Compound your winnings. Using a bigger betting bank will mean smaller stakes, but you can grow those stakes by compounding the winnings or using a fixed percentage of your bank (e.g. 1%) on each bet. Einstein called compounding “the eighth wonder of the world” and if you allow your bank to grow in this way then the rewards can be quite amazing
  • Don’t place random bets. When there’s a big sporting event on with lots of hype around it, there is a temptation to put a bet on to make it more interesting. Other times you may be bored and fancy a wager. Don’t do it – professionals never would
  • Keep records of all your bets. This will allow you to keep on top of all your betting and see where you are going wrong and what you’re doing right, and help you improve
  • Spread your risk. Decide how much money you have to invest, then split that investment between say 5-10 different tipsters, making sure of course that each one has a sufficient bank allocated to it.

Congratulations if you have read this far. I hope it has helped you on the path to making more money from betting.