At Sports Betting Portfolio we have two metrics of performance for our service and individual tipsters – units profit and ROI. I am regularly asked which of these is the most important, and to be honest there isn’t a simple answer. In fact you need to understand both of these metrics to make an informed decision about a service’s performance.
ROI stands for Return On Investment, and it is important to note that this is a different calculation to how other industries use it. In the betting industry we understand ROI to be “units profit divided by total units staked”. The advantage of the ROI metric is it shows you how big your edge is in the bets you take. A 15% ROI shows you have a bigger edge than someone with 3% ROI. The disadvantage is that it doesn’t consider how many bets are being measured. You could have a tipster who has only ever tipped 3 bets, had them all win and have an ROI of 80% (if all bets were at 1.80 odds). But what is the point in following a tipster who bets so rarely – you can’t generate enough profit long term because there aren’t enough bets. It is important to note that with ROI we are looking at total staked and not the initial deposit you make in to your bankroll. You may start with 100 units but over the course of a year be staking 5000 units. That isn’t due to having 5000 units in your bankroll but by turning over the money over and over again.
So this brings us to units of profit as a metric. This is the more simple calculation as it is “total units returned – total units staked”. The advantage of this is that you can take your unit stake, multiply it by the units of profit and easily understand what your likely returns are based on that performance. Unfortunately it isn’t as simple as comparing total units of profit between services to understand which is best. A service could recommend a 1,000 unit bankroll and have a 1-20 unit staking system, whereas another service could recommend a 100 unit bankroll and have a 1-5 unit staking system. The 1-20 unit system has potential for a higher number of units profit simply because of the staking system, but the suggested bankroll is much higher. It does of course have the potential for higher, or quicker, losses due to the staking system, but it simply isn’t possible to compare two services based on units profit without understanding the staking systems being used by each.
In summary, we can’t take a single indicator alone to highlight which services perform best. Instead we need to look at both units profit and ROI. If you have 2 services with 1000 units of profit but differing ROIs then it is fair to make the assumption that the higher ROI service is performing better because the other metric is the same. If you see a service quoting only units profit or only ROI then make sure you ask them the right questions before joining because without both you are only getting half the story. Any good service should have a strong grasp of their numbers and be able to explain the importance of them.