Investing in betting

One of the themes that most fascinates me about sports betting, and football in particular, is that related to betting as an investment.

If we stop for a moment to reflect and take a look, even if only superficial, at the financial market, we can easily realize that the most “secure” investments, such as postal bonds, guarantee a return of around 5%.

This means that by investing 1000 euros for 12 months, we will have a “gain” of 50 euros (!!!). Which is not even too true as we should go there to see the taxes, any fees and various expenses related to the investment system in Italy.

You will tell me, and rightly so, these investments involve thousands and miles of euros, so investing for example 100,000 euros in a year you will have 5,000 (always excluding taxes).

Obviously then there are also riskier investments, but where there is risk capital is greater also the fluctuation, so for the same investment you could lose everything or earn a lot.

Let’s see how even bets follow this type of logic: bets “safer” will have a low odds, bets riskier will have a very high odds, because the uncertainty of the event makes it very complicated the prediction and therefore must ensure a high premium.

And just as our personal preparation and knowledge of the reference market can guide us in undertaking a risky investment (for example: a person who works with new technologies would be more able than a person who runs a bar to know if the actions of Google and Amazon are considered good investments or not), so knowledge of the reference market (which for football could be a certain championship or a team that follows a lot) can guide an experienced gambler better than a novice in choosing signs and odds.

I think so far I’ve said logical and shareable things. Things become more inexplicable when we make a very simple consideration: A 5% equival yield to a quotte of 1.05 and its also tax free because the sports bets are taxed at the source.

Well: in practice if I invest 1000 euros on postal bonds I take 50 euros after a year, and on these I also have to pay taxes. If I invest 1000 euros on a 1.05 share, I take my 50 euros immediately and detax.

And those who know a minimum of sports betting know that 1.05 is a ridiculous amount.

So if things are so simple why doesn’t anyone decide to invest with bets?

Cultural reasons: Bets are seen as generic gambling, and therefore losing regardless. Only there is a difference between roulette, governed by chance, and sports betting, where the bank is true that always wins, but where it is possible that we win too!

Lack of knowledge of the concept of odds: the vast majority of people are convinced that betting consists of betting 5 euros to win a thousand, and that therefore only high odds are worth considering.

Not knowing that bookmakers offer for example a 2 share when they think that there is just under 50% chance that the event will occur, which compared to the concept of investment expressed so far involves a frighteningly high percentage of risk on which you should never invest heavily!

Poor preparation: many people bet so much for, ignoring that the development of a forecast, from an investment point of view, must be weighted and derived from information and time spent in the study, exactly the same as that applies to financial investments. None of us would invest our money in random stocks, and likewise no one would have to bet a euro on an event of which they have little information.

Psychological reasons: the bets are emotional, it is difficult to hold back, so much so that it is very simple to ruin with the game, especially when you continue to bet at random in an attempt to recover what you have lost.

After these considerations I’ll be asked: why don’t you invest 100,000 on a 1.05 quota and show us what you’re saying?

For two simple reasons: the first is that I do not have the 100,000, the second because even if I had not bet them, the second is because it is not absolutely easy to think of doing so even if the logic tells us that the event on which we rely if it is not mathematically certain that little happens we are missing.

They are mental and cultural barriers, dictated also by the common sense of knowing that there is always that minimum margin of risk for which “the ball is round”.

However, I am convinced, and the articles in this blog will follow this experiment with lots of games proposed, that it is possible to build a return on bets, also considering the defeats that inevitably there will be, that has nothing to envy to those of the so-called “safe investments”.

Also because, taking the example of before, I will try to make games on which I would have no doubt to put above 1,000 euros!