ROI and yield in sports betting are two important ways to work out how profitable your betting is. In this article, you can find definitions of both of these methods, as well as instructions on how to calculate them.
ROI (Return On Investment)
ROI is used to determine the profitability of investments, or in this case, bets that were previously made. To calculate your ROI, you use the amount you’ve invested and the income you have received. In sports betting, more specifically, it is used to determine the proportion of the increase or the decrease of your bankroll from the initial amount of your bankroll. Your bankroll is the amount you have designated to this specific betting campaign/strategy/process.
You decide that you want to bet $1000 in total on a specific football tournament. This is your bankroll for this tournament. After each bet’s result, you then calculate the ROI for this tournament. If you earn a profit of $150 in your first week, you then have an $1150 bankroll. To work out the ROI, you divide the growth ($150) by the initial investment ($1000) and then you will get your ROI percentage (in this case, 15% ROI). If after the tournament is finished, you have a bankroll of $1400, that means you would have gotten a 40% ROI.
If your ROI was a negative percentage, that means that you lost some of your initial investment.
Remember that some factors that might skew your ROI is:
1. The correlation between the bet amount and your total bankroll
2. The number of bets in a specific timeframe
To even out these factors when you are looking at ROI over a variety of investments, make sure that you always note the time period that it was in and how many bets you made during that time. This will help you filter ROI results accordingly.
Yield is used to measure the profitability of certain bets. It is made up of the profit in proportion to the turnover. You divide the total amount of profit you have earned by the amount of money you have spent in bets you have made and then you will get the yield percentage. This calculation is usually only used by more experienced gamblers and should take place over a longer time period than ROI needs – this is because you need a high number of bets before you can calculate a truly accurate yield percentage.
If you make a turnover of $50000 which excludes a profit of $600, that means that you have yielded 1.2%. You work this out by dividing 600 by 50000 and then timesing it by 100 to get the percentage. Using the yield calculation, you will be able to see the true effectiveness of your betting.
If the yield was a negative percentage, this would mean that you are losing more money than you are winning.
Overall, it is better to use ROI if you have a smaller bankroll or like to keep your betting strategies separate, and you should use yield if you have more liquid cash and want to monitor your bets long term or across multiple campaigns.