The point of betting is to ensure positive expectations in order to continue to make a profit. In this process, the bettor must consider the effect of randomness and luck on the outcome of any event. In this article, we will discuss extensively whether success in the betting world is based on luck or an ability that can be acquired through learning.
The Paradox of Luck and Ability
The betting market is full of odds. Bettors probably don’t want to hear this word. Of course, casino games such as roulette and craps are purely games of chance, with simple rules of chance controlling everything. For sports, however, the odds of the outcome are largely unknown.
It is certainly true that this must be an expected chance of profit, and technically speaking, some bettors may be better at obtaining and processing news and information than others. But in reality, because of the effect of what is known as the paradox of ability, only a few players apply to this situation.
Prediction has become an arms race, with players competing to use more complicated methods of predicting the outcome of sporting events. Pure ability may increase across the board, but we remain relatively unscathed in most cases.
When pure predictive ability increases, the difference between the best and worst bettors is reduced. Because betting is a game of ability and luck, if the difference in relative ability is reduced, the result is an increase in the effect of luck. If you take into account the cost of betting (the bookmaker’s profit), most bettors are likely to lose money in the long run.
Generally speaking, the lower the score of the sport and the greater the number of players involved, the more important the role of luck.
The Environment of Ability
In general, learning professions or abilities are based on “natural decision making,” which means memorizing data sets and patterns and recalling them over time through practice and feedback. To learn effectively, the environment should be predictable, sufficiently regular and stable to produce meaningful cause-and-effect relationships. Is this true for sports betting?
There is a problem with learning to predict. In fact, we don’t always get paid for our bets. If you spend more time and effort predicting the outcome of a sports game, you might actually become more proficient at it. But betting ability isn’t just about picking winners. Instead, it’s about picking better than everyone else.
If equally competent players push the odds to “real” odds that truly reflect the outcome of the game (a process called “odds exploration”). To win or lose is simply a matter of odds. If the betting market is generally efficient, that is, if it reflects the “true” odds of the outcome. Then it seems difficult to beat the wisdom of the crowd.