Track Picks


ROI


ROI: Return On Investment

What is "Return on Investment"?
Return On Investment (ROI) is a common term used in financial circles. ROI is the amount of profit gained or lost relative to the amount of capital which was originally invested. When applied to sports betting, the profit is the amount of money won or lost in a wager. The risk is the initial money risked when placing the bet.

How is 'Return on Investment' calculated in sports betting?
In sports betting, a return on investment is calculated by dividing the profit or loss from your sports bet by the amount of money you risk losing when making the wager. Any money won is the profit. The amount risked is the initial cost to place the bet.

Why does Trackpicks rank handicappers based on ROI?
Measuring handicappers performance based on ROI provides more information to bettors than the total number of earned. The use of ROI will lower the rankings of handicappers who win by always playing heavily favored "safe" wagers. This is because ROI decreases as a favored side odds increase as can be seen in the examples.

At Trackpicks, the amount risked depends on the moneyline. When the moneyline is negative, the amount risked is the absolute value of the money line. For example, the wager "Utah Jazz -8.5 -110" has a moneyline of -110. The amount risked is $110 x the number of units played. In the case of a 5 unit play, the risked amount would be $550. If the wager won, the profit would be $500 and the ROI would be 500/550 x 100 or 90.9% . If lost, the amount lost would be -$550 and the ROI would be -550/500 x 100 or -100%.

When the moneyline is positive, the amount risked is the number of units x $100. For example, the wager "NY Mets +105" has a moneyline of +105, but the amount risked is $100. If 3 units are wagered, the total amount risked is $300. If the wager won, the profit would be $315 and the ROI would be 315/300 x 100 or 105% . If lost, the amount lost would be -$300 and the ROI would be -300/300 x 100 or -100%.

Multiplying the formula by 100 coverts ROI to a percentage. This formula is used to rank handicappers' performance over a period of time or for a particular sport. It is calculated by dividing the total earned units by the total amount risked x 100. In this case, the number of units made per play is factored into the calculation of ROI.


Here are some examples of ROI for different types of winning wagers. Notice that ROI is not affected by the number of units wagered for an individual play. The ROI for winning wagers on negative moneylines (favored side) will be less than 100%. However, the ROI for winning wagers on postive moneylines (underdogs) will be greater or equal to 100%.

Here are some examples of ROI for losing wagers. Regardless of the moneyline, all losing wagers have a ROI of -100%.

For more information, go to
sportchalk.com/sports-betting-strategies/understanding-r-o-i-your-return-on-investment-in-sports-betting