Sports betting losses are tax-deductible, but under very specific conditions. The most important of these conditions is that you can't claim losses that total more than your gains. So, if you lost $5,000 on sports betting last year but took home $7,000 in the end, you'd be able to deduct all of those losses. May 08, 2020 Professional traders develop their own strategies, and earn a living from them using the betting exchange (e.g. Becoming a successful sports trader is tough — because the betting markets are highly competitive and efficient. The betting exchanges function like financial markets, and many of the same principles apply to both. Sep 07, 2020 Similar to our guide to NFL betting tips, we wanted to put together a little piece that explains some of the basic things you need to know about sports betting before putting your hard earned cash on a game. Sports Betting Tips For Beginners. How does a spread work? In games like football and basketball you'll see two teams listed. Oct 18, 2016 The aim now should essentially be to study the subject of sports betting extensively. There are several ways to do this. Our sports betting guide, which I linked to earlier, is certainly a useful resource. However, there are other high quality betting guides on the web as well. You could also think about signing up with a betting forum.
This is the first out of a three-part article series, which purpose is to investigate how one can make money from sports betting and the requirements of making a living from it.
Part 1: Having realistic expectations AND Different ways to make money from betting
Setting realistic expectations
If you already feel like skipping this part you are the type that would benefit the most from reading it.
First off, it is important to have realistic expectations.
As with anything in life, making money from sports betting requires time and effort.
And those looking for a get-rich-quick solution or minimal work are setting themselves up for disappointment.
Whether you have a job or are a student, things like this start as a side project.
Most of the people who work for Trademate are building their bankroll on the evenings and weekends, while working on Trademate during the daytime.
Whether you are studying, working a 9-5 job or making a living from playing poker, we think this approach makes a lot of sense.
It happens to be very compatible with value betting since that is when the majority of games are played anyway, and thus when the edges occur.
If you don't need the money from betting to cover living expenses, it also reduces your risk as you have more legs to stand on financially.
It also enables you to reinvest any profits you make and keep building your bankroll. This, in turn, increases your turnover and potential profits.
You can keep doing it this way until you reach a point where it makes economic sense to do it full time.
Different ways to make money from sports betting
There are 2 main ways to make a living from sports betting:
The first is being able to pick winners. Which is what 99% of all tipsters and bettors out there are trying to do, and of which probably 98.9% are failing at.
To do this successfully, you would need to specialise in a market, preferably a niche market, where the bookmakers do not have the same level of information and knowledge as you, or where they can not interpret it as well.
If you want to try and create your own odds models, this article can help you get started.
The second way is to find value in the odds. Finding value can again be split into three groups: 1) Matched betting, 2) Arbitrage betting and 3) Value betting.
These can be ranked based on their potential risk and reward. The pros and cons of them are discussed in this article.
Also this guest post examines the pros and cons of arbitrage betting vs value betting.
At Trademate we are all about value betting as this gives the highest potential return of the 3 ways to make money.
The downside of value betting is that the risk is higher than for arbitrage and matched betting. This is because you only bet on one side of the game, the variance is higher. These articles and video explain variance.
Let's use an example: If one takes a bet with 2.0 in odds, one can only expect to win 50% of the time. In the short run, anything can happen, e.g. losing 10 coin tosses in a row.
But over a large sample size, let's say 10,000 tosses, the distribution of the number of heads and tails will be pretty much spot on 50/50 (the theory behind it is explained in this article and our big data analysis has shown that it has worked very well in practice for the Trademate users).
In practice, the potentially high variance nature of value betting, means that one needs to be prepared to place hundreds of bets, maybe thousands depending on the average closing edge and odds before one can expect the variance to even out.
One thing they all have in common is that they have hit bad swings, but made it through them.
We have had users who were breakeven at 1,500 bets, before they hit a good run and their profits soared up and past their EV line (expected value).
Before you start you should make sure that you understand the underlying principles of value betting, mainly exploiting market inefficiencies in our case.
It is not for everyone and if you decide that it is not for you, then that is ok. But then you will not be making a living from betting anytime soon.
Next, one needs to have the patience and discipline to stick with it, through both the upswings and downswings.
Reducing variance in value betting
There are steps you can take to reduce the variance in value betting, such as placing on lower odds, only placing one trade per game, placing trades close to kick-off, using a proportional staking strategy such as the Kelly Criterion and limiting it to 30% of the Kelly.
Also, one should apply a max stake size. We recommend operating with 1-2% of your overall bankroll. It is possible to set it higher and also to use a higher Kelly percentage if one wants to take more risk and increase the turnover.
Bookmakers limit winning players and how to increase your lifetime value
Whether it being matched betting, arbitrage betting or value betting, the soft books do not like winning players.
To stop players from winning, bookmakers will impose stake sizing limits on them.
Without getting a solid turnover, making money from either option becomes really difficult.
How long it takes varies from bookie to bookie. There are also internal differences at the bookies.
All of this does not mean that it is not possible to extract good value from them first though!
Also, there are steps one can take to make the accounts last longer before they get limited and thus increase the lifetime value of the soft bookmakers.
A topic we have covered in multiple articles, such as:
Article: How to stay under the radar and avoid bookmaker limitations
Article: How bookmakers track your every move and how to get around it.
Article: How bookmakers profile winning players
At Trademate we are currently supporting 100+ soft bookmakers. Playing through all of them should take some time.
Also, because we have so many different bookmakers and also trades to choose from, the number of people who pick the same trade is not particularly high and thus each individual account lasts longer.
We also switch out a couple of bookies every few months to keep things fresh and have added 10 new bookies this year. So our overall value offered is constantly increasing.
Sports trading
Finally, what about sports trading? Traditional trading involves buying and selling assets. Sports trading involves either placing a value bet, an arbitrage or hedging a bet.
Hedging a bet is basically to turn a value bet into an arbitrage bet. The difference between arbing and hedging is that when hedging, the bets are not necessarily placed at the same time.
For example in an arbitrage you place a bet on the home, draw and away within a short period of time, e.g. 1 minute. When hedging you would first place a value bet on e.g. the home team to win.
Then you can turn it into a sure win or a sure loss by taking a bet on both the draw + away team, or an Asian Handicap bet at a later point in time.
Hedging enables you to reduce your risk, but it also reduces the potential profit. We have covered the topic of hedging a bet in this article.
Ready for Part 2?
In the second part of the article series, we will have put some numbers on the different input factors that affect potential earnings and run some simulations.
Gambler X is a professional sports bettor who makes his living betting legally in Las Vegas. He has agreed to share insights and experiences in the betting industry but prefers anonymity to keep his edge against the sportsbooks.
I am a professional gambler in my mid-30s, based in Las Vegas. Although I dabble in a variety of gambling ventures, sports betting is my bread and butter. For the past five years, it has been my family's main source of income, fed and clothed my children and allowed my wife to go back to school to finish her education. It has given me the type of personal and professional freedom that I try not to take for granted.
The life of a professional sports bettor is filled with worry. Imagine busting your butt all day, only to have the difference between a winning and losing day decided by a two-point conversion in a preseason game (that happened to me a couple of times this year). Sometimes those bad days turn into bad weeks, which turn into bad months ... which turn into bad years. It's impossible to not go at least a little crazy from time to time. It's basically a job requirement.
The worst part of it is that the day-to-day variance isn't my main concern anymore. What really keeps me up at night is the fear of losing my edge. I've been asked many times what my biggest fears are for the future of sports betting, and my answer is always the same: change.
Nevada was a bubble, and it was nearly impossible for a U.S. citizen to make a living betting sports (at least legally) unless he or she lived here. But with legalized sports betting now in five states (and counting), that change is here.
And I'm not happy about it.
I was 18 years old when I made my first sports bet. It was with a bookie (gasp) in the small midwestern town where I grew up. I was spending most of my days grinding away in an underground poker game, in which the only thing more common than a bookie was a broke degenerate trying to place a bet with him.
It didn't take me long to figure out that all the bookies were doing was adding a few points to all the local teams, just locking in value. But if you tried to take the other side, they would cut you off after a few bets. What's a young man trying to find an edge supposed to do?
My answer was to start taking bets myself.
I undercut the market by offering the same numbers as everyone else but not charging juice. By offering all my bets at even money, I quickly became the favorite bookie of every casual bettor in town.
It was a worthwhile venture, but it didn't make me rich by any means -- and I still didn't really understand much of anything about sports betting. I did understand that being a local bookie was a terrible way to try to make a living and that moving to Vegas to try to make a living being a professional gambler was probably not my best idea. But it had to be more fun than spending the rest of my life in a dreary midwestern town. And I knew I wouldn't be able to live with myself if I didn't at least try to make it in Sin City.
My big break was that the one guy I knew who lived in Vegas had a similar idea and was already way more successful than I could ever dream of being. I was lucky that he was willing to show me the ropes and that I picked it up quickly. My earliest memory of being a pro sports bettor in Vegas is driving 40 minutes north of The Strip to pick off bad numbers at the then-independent Aliante sportsbook -- nearly every single afternoon.
Being a professional sports bettor is a lot more than just picking winners. It's about getting action down with casinos that actively go out of their way to deny your bets or ban you from the sportsbook entirely. It's about getting five figures on a game and not moving the line. It's about finding an edge and pushing that edge hard enough that you make a great living but not hard enough that the sportsbooks figure out where they are screwing up.
All of that might sound easy -- and to a certain extent it is in Vegas, where there are so many casinos and gamblers that it's easy to stay anonymous -- but it takes time and plenty of patience. And it has gotten harder in Vegas.
The number of sportsbooks here that offer mobile apps has basically tripled. And while my bet sizes have quadrupled, my edge has decreased. It's well documented that most books are banning winners, but my edge has decreased for other reasons. As much as everyone wants to make fun of them, sportsbooks are getting sharper. They are making fewer and fewer egregious errors and doing a better job of staying in line with the sharper overseas markets.
I used to be able to see a bet that was out of line with the market, hop in the car and go grab it with ease. Those days are long gone -- and will never come back.
Now that legal sports betting has spread to other states, there are more variables and more information to learn.
Legalization means more places for sharp bettors to sneak bets through without moving the market. More casinos sharing liquidity and information to stay one step ahead of bettors. More jurisdictions and hodgepodge shops where one is the majority owner, but lines are set by another, and software is provided by a third. It's just more stuff to make my life miserable.
And it means I've been traveling all over this summer on fact-finding missions.
I've visited Delaware, New Jersey and Mississippi to see how things are run. I traveled all over to test out the new markets. I pushed them hard. A lot of bets at max limits, just testing every place over and over again with the idea of trying to find some place outside of Nevada that would be sustainable for a professional bettor longer-term. I haven't been particularly impressed.
Take Dover Downs in Delaware, for example. The book is owned by the state lottery, and William Hill sets the lines and decides what bets to take for a very small percentage of profits. This strategy leads to dealing one-way lines, on which they are taking action on only one side and then banning anyone William Hill in Las Vegas deems likely to win money. If the State of Delaware is the primary beneficiary from the sports book, then shouldn't it be required to offer a fair system in which anyone can play?
In Mississippi, I mostly targeted MGM properties. The staff were friendly, and they took big bets with no issues. But as I suspected, they mostly mirror MGM Las Vegas' lines, so there is no real opportunity for me.
And New Jersey? It was supposed to be the golden goose, but there have been several hiccups. Don't even get me started on the recent FanDuel fiasco.
For me, independent books that set their own lines and manage their own risk are the lifeblood of my business. They mean more chances to pick off bad lines, opportunities to arbitrage and more places I can go fire the same bet at the number I want. Of all my travels to the new states, the most disheartening thing to me was how few of those opportunities were out there.
Online Betting Reddit
The manager at every sportsbook I visited is underqualified and doesn't make a move without checking with the bosses in Vegas first. They aren't really aware that for someone who does this for a living, one tiny mistake or moment of complacency can cost big time.
There are a few lucrative spots in these other states, but the cost to exploit them is so prohibitive that I'm better off crawling back to the desert and trying to gather the facts about the new and ever-changing environment.
Reddit Soccer Betting
That's just the glamorous life of a sports bettor.
