3

I know that the overall expected value of sports bet is negative, however this is not as straight forward a system as scratchcard for instance.

I am not asking whether it is a good investment to put money in sports bet, I am just wondering if there are people who actually make a living of it.

I am not talking about someone who won one bet that he lived off of his entire life nor bookmakers or the people who actually manage the bets. But people who have demonstrated through the law of large numbers, that there expected value when betting on sports was positive.

12
  • There are always people who excel in some area and defy the odds. For example, anecdotally, over 90% of day traders lose money. Those in the top one percent are written up in the financial magazines. Once upon a time there were tape readers who could watch the ticker tape and trade profitably. They too were the exception. I have no clue if this exists in sports betting but by the very nature of a non finite sample, it's likely that someone is doing it. Commented Aug 17, 2018 at 17:25
  • I am just asking because it is largely acknowledged, that trading requires skills, knowledge and can be profitable. However, with sports bet, there doesn't seem to be a widespread consensus, and a large amount of people seem to view it as a totally random system, in which it is not possible to "excel". Which would likely mean that in the long term, basically nobody has ever made a profit with these bets.
    – PaoloH
    Commented Aug 17, 2018 at 17:42
  • Define: "sports" (Does it include poker, for example?), also "betting" (If poker is included, do you mean bets within a poker game, or those placed by people outside a given game, betting on who will win?)
    – GreenMatt
    Commented Aug 17, 2018 at 20:06
  • @GreenMatt I mean sports in the larger sense so poker could be included as a sport, however I really mean sports betting so people betting on the outcome of a game they are not a part of. The player with a stack in a poker game are not really within the scope of sports betting they're really just playing the game.
    – PaoloH
    Commented Aug 17, 2018 at 21:35
  • @DJClayworth Of course, that's why I specifically mentioned them as not counting as a possible answer.
    – PaoloH
    Commented Aug 17, 2018 at 21:37

4 Answers 4

7

Your question seems like it could be interpreted in a few ways, but the law of large numbers is going to have a hard time identifying someone who is good enough at gambling to make a living (as opposed to someone that turns out to simply be lucky, which the law of large numbers suggests is likely to occur more often than never).

Additionally, the amount of winnings depends on the size of the stake, and so a bettor would need to already have a decent amount of money to be able to win enough to live on, and so a strictly professional sports gambler might not be feasible (in that another source of income or independent wealth is probably necessary to win enough that one could live on the winnings alone).

I'm not aware of any empirical cases, but that's not surprising as the majority of sports betting in the U.S. is likely to have been illegal until recently, and a consistent winner may not want to draw attention to themselves either way.

Interpretation 1: Is there or has there been anyone whose net return from sports betting has been positive?

Almost certainly.

This is "law of large numbers" territory. With the number of games played and the variety of types of bets that can be placed (winner, point spread, tournament brackets, fantasy leagues, etc.) there have been an enormous number of wagers placed among a huge number of people. For this interpretation to be correct, only one of those people needs to win more than they lost.

The time horizon being discussed is very important. Someone who wins consistently for 20 years may have "made a living" off of it, but a string of losses thereafter could still easily drive their long-term returns into negative numbers. Someone could, for example, just be lucky enough on which bets they placed and in what amounts that they happened to win money.

Interpretation 2: Is there or has there been someone who was so skilled at predicting outcomes in sports that they actually have a positive expected value from any given dollar wagered?

Soft maybe. This is hard to evaluate because the "skill" of the choices such a bettor would make is essentially impossible to differentiate from the lucky gambler above.

An important difference between sports betting and lottery tickets or casino betting is that sports bets are not based on well-defined rules (like 5 numbers being independently drawn). Instead, bookmakers set odds, and they do so not based on what they think the outcome will actually be but rather in order to attract bets in the correct proportions that the pool will be able to pay out to the winners, plus a margin for the bookmaker to keep.

In this case it's less about predicting outcomes successfully than it is doing so with uncommon information, such that the odds allow for winnings based on that information that are enough to cover living expenses while leaving enough cash to stake in the next bet. Whether or not the odds allow for that information to be profitable is a factor totally outside of the bettor's control.

Interpretation 3: Is there or has there been someone who is sufficiently skilled in the institution of sports betting that they can have a positive expected return on any given dollar wagered?

Perhaps, but the time horizon is again very important here.

A gambler who can manage a true expected positive return is far more likely to exploit arbitrage opportunities across multiple bookmakers (offering odds for different outcomes that can "balance out"), and so hedge their bets effectively, instead of to be great at predicting outcomes of sporting events. This is obviously heavily dependent on decent math skills and the environment in which the betting takes place as opposed to being good at betting on sports, specifically. I would not expect such opportunities to exist steadily over any given stretch of time.

Nonetheless, if someone only bets in these situations and places large enough bets to live off of the net winnings, then the net expected value of the actual bets could easily be positive.

Interpretation 4: Is there or has there been anyone capable of making more informed bets than others such that they can derive enough winnings to live on?

I suspect that this is the closest to your intended meaning, and the answer to this is moderately likely to be yes, provided that we are not limited to publicly available information. Knowledge of things like rigged games obviously has very high value for a bettor (though in that case they're not exactly betting...).

But there are other bits of valuable information an insider could gain that might give an edge over the average bettor, such as knowledge of a putative injury to a player or an upcoming suspension, which might allow for favorable bets to be placed before that information becomes public (if it ever does) and is then incorporated into other bettor's decisions and the odds offered by bookmakers. It's not crazy to imagine that a well-placed or well-connected person might be able to gain enough information to generally win bets.

It's probably also possible, if not necessarily feasible, to seed the environment with information (true or not) in order to manipulate odds offered in the bettor's favor.

Final Note

I would think that the people that understand sports betting markets well enough to have an expected positive return on "honest" bets are very, very likely to be bookmakers instead of bettors. Bettors have to take odds as they find them, and so (aside from inter-bookmaker arbitrage) can't necessarily leverage information into sufficient winnings even if their knowledge is guaranteed.

7
  • These are very interesting points, I hadn't thought about all these cases. Originally, I was thinking of something along the lines of interpretation 2 and 4, but everything in here is definitely relevant.
    – PaoloH
    Commented Aug 17, 2018 at 19:32
  • 1
    Wrong. Period. Sorry.
    – TomTom
    Commented Aug 17, 2018 at 22:58
  • @TomTom Care to expand on that, at all?
    – Upper_Case
    Commented Aug 17, 2018 at 22:59
  • @Upper_Case Sure. My answer has a list of names of people that made tons of money. Endy's answer has a short anectody of one of them - which was betting 51381 bets on one race (!) to corner the statitics. Some fotunes are made in this area, which means it is factually wrong to say it is not possible. And it is not "pure luck" when you run numbers that high and companies doing that for years.
    – TomTom
    Commented Aug 17, 2018 at 23:02
  • @TomTom I never said it was not possible, nor did I say that luck is the only way it could happen. The names you contribute in your answer, as well as the references in the others, are excellent responses to the question.
    – Upper_Case
    Commented Aug 17, 2018 at 23:10
9

You only asked if there exist people who made a living off of sports betting, not if there are a lot of them. And the answer to that is "yes".

Bloomberg's profile of Bill Benter tells one rather interesting story of one who made his fortune writing algorithms that analyze horse-betting.

The only sound was the hum of a dozen computers. Bill Benter and an associate named Paul Coladonato had their eyes fixed on a bank of three monitors, which displayed a matrix of bets their algorithm had made on the race—51,381 in all.

Benter and Coladonato watched as a software script filtered out the losing bets, one at a time, until there were 36 lines left on the screens. Thirty-five of their bets had correctly called the finishers in two of the races, qualifying for a consolation prize. And one wager had correctly predicted all nine horses.

“F---,” Benter said. “We hit it.”

... Benter and Coladonato had won a jackpot of $16 million...

“We can’t collect this—can we?” he asked. “It would be unsporting. We’d feel bad about ourselves.” Coladonato agreed they couldn’t. On a nearby table, pink betting slips were arranged in a tidy pile...

Then they posed, laughing, for a photo—two professional gamblers with the biggest prize of their careers, one they would never claim—and locked the tickets in a safe. No big deal, Benter figured. They could make it back, and more, over the rest of the racing season.

0
3

I think the real question is whether sports betting is a game of skill. I believe the answer is definitely yes, there is at least some skill involved, making it likely to be a winning proposition for those at the highest skill level.

I know of two people that might prove it's possible, even though both do not currently use sports betting as their primary source of income. I suspect because it is harder and less of a sure-thing than their day jobs.

Person 1: He would bet college and pro sports games here and there, but only when he detected a lopsided line, so overall this was rare compared to the bulk of his winnings, which came from fantasy football. Years ago (before he had a family), he would study pro football incessantly. On Sundays he had every game going at the same time on 7 different TV's. I was with him one day and the only time he moved from his chair was for bathroom and food breaks. He would play multiple season-long high-entry fee fantasy football leagues with large payouts. He averaged about $50K in winnings for 5 years in a row (with the worst year being positive $8K). Now that he has a family he's slowed down since it was killing his Sundays (and Monday and Thursday nights, and the rest of the week reading the news).

Person 2: He is already wealthy from owning successful businesses, and he loves horses. He has a stable on his estate and he raises race-horses. Most of his profits from the horses come from breeding, but also from his horses racing and sometimes winning. Being involved in the horse racing business makes him very in tune with the betting lines and he knows when the odds are occasionally out of whack. I only went to the track once with him, but while we were there he only bet on one race, because he said that was the only one where he knew the odds were off. The horse he bet actually came in fourth and he didn't win, but it was longshot odds to place and he basically said, "that horse has shown some speed in practice and at those odds I'd make the bet every time". Most of the time the odds aren't worth it and he'd pass.

My sample set is obviously small, and in both of my examples they choose a different way to earn a living for various reasons, but being that sports betting has some element of skill, it is extremely likely that there are skillful people out there that choose to use that as their main source of income.

3

Yes, there are some actually.

Check out the stories of:

So, yes, it is possible. It is not easy, but a few do not merely make "a living". They make a crap ton of money.

It is not what you would you normally consider as gambling. It is high-end computer banks finding edges and inconsistencies in the bets on their behalf to create a positive outcome.

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .