In school, starting from the first grade, they constantly told us — ‘Study, math will be useful in life.’ I started to realize this when studying poker, and now mathematical terms have firmly entered betting. Well, let’s get to the point.
What is Variance
The term ‘Variance’ is a key part of the mathematical field known as probability theory.
Variance refers to the deviation from expectation. In simple terms, it’s the deviation from the norm or the difference between the expected profit from bets and the actual amount. For example, in a match with odds of 1.1 on the favorite, calculations show that the probability of winning is around 85%. That’s a very high figure, but 85% isn’t 100% and doesn’t guarantee a successful bet. It simply means that, based on the current matchup, the favorite should win 85 out of 100 games. Somewhere along that stretch, there will be 15 losses — that’s the variance.
The simplest example that best illustrates variance is flipping a coin.
When flipping a coin, we have a 50% chance of heads and the same for tails. The more flips you do, the closer the final result will be to 50%. For instance, after 10 flips, you might get 7:3 or 6:4 in favor of one side, which is a difference of 20-40% — that’s what we call variance. But if you flip it 100,000 times, the numbers will likely be close to 50,000 for each side, with minimal deviation percentage.
Practical Application
Variance works closely with probability theory, and thanks to this relationship, bettors have learned to do two things: manage their finances effectively and hunt for value bets.
What is Value
Value bets are wagers placed at inflated odds. The term comes from poker, where it’s called ‘value bet,’ meaning ‘a bet with an edge.’
Poker makes it straightforward. Players know the odds of drawing the cards they need and can easily calculate value bets. In betting, it’s more complex because the player has to determine the chances of a specific athlete or team winning on their own. Let’s break it down.
Value bets can only be found in leagues or events where the bettor has real expertise. Bookmakers often don’t have enough staff to deeply analyze every game. In most cases, odds are set based on statistical data, ignoring secondary factors. Analysts at bookies typically focus on top-tier leagues, overlooking lesser ones, where finding value is easier.
Example of a Value Bet. A bookmaker offers 1.90 odds on each tennis player to win — let’s call them ‘Player A’ and ‘Player B.’ This implies that, in the bookmaker’s view, each player has a 50% chance of winning. But as tennis enthusiasts, we know that Player A recently suffered a minor injury, called for medical attention twice in their last match, just flew in from Australia to Italy yesterday, hasn’t acclimatized yet, and is recovering from a cold, among other issues. Meanwhile, Player B has been in Italy for a while, has no health problems, and is in decent form overall. Naturally, under these circumstances, Player B’s chances of winning are clearly above 50%, say at least 65%. Placing a bet on them at 1.90 odds is a value bet.
Let’s calculate: If we make 100 such bets at 1.90 odds, each for 1,000 rubles, with a 65% win probability, we’ll end up with 23,500 rubles in pure profit.
- Total bet amount: 1,000 rubles * 100 bets = 100,000 rubles
- Revenue from winning bets: 1,000 rubles * 1.90 * 65 bets = 123,500 rubles
- Net profit: 123,500 rubles – 100,000 rubles = 23,500 rubles
Financial Planning
Experienced bettors follow two key rules:
- Bet no more than 3-4% of your bankroll.
- Use a chase strategy in case of losses.
Bets of 10% of your bankroll are considered extremely risky. With something like a coin flip, it’s entirely possible to get the same outcome 10 times in a row and wipe out your balance.
As for the chase strategy, with value bets, you can double your bet amount after each loss to cover all previous expenses and immediately turn a profit. This can help mitigate variance, but variance can still derail a player by delivering the wrong outcome multiple times, so this method is risky.
Conclusion
Variance is every bettor’s nightmare. It introduces randomness into betting, which isn’t favorable for players. However, with proper planning and solid analysis, its importance can be minimized.
