The primary reason to place a bet on any sport is, of course, to win as much as you can while minimising your losses. If you are looking to get into horse racing, it's important to be aware of your overall profit. It's always crucial to realise if you are losing money or making a profit at any given time. But we can very easily become complacent. If you get a few big wins in a row, this could cloud your judgement in the long term.
This is why it's so important to be aware of your return on investment and know your win-to-loss ratio. This is where the return on investment (ROI) becomes a very serious, but essential strategy, to your overall enjoyment of betting on horses. So what is a good ROI in horse racing?
What Is a Return on Investment?
Return on investment is, put simply, the money you win or lose with any investment. It could be termed as a “rate of profit” or “return.” It is a term used in financial circles, where an investor will calculate their ROI based on transactions. One of the most commonly used examples is if you purchase a house. If you bought a home for £1,000,000, sold it for £1.25 million to use later, but you pay taxes of £100,000, your ROI is calculated as £150,000, as this is 15% of your initial investment.
When it comes to betting on horses, it is a solid horse betting strategy to know what your ROI is. It's recommended to calculate it for a specific timeframe, whether this is monthly or yearly, depending on how much you get.
Why Is ROI Important?
One of the reasons ROI is very useful is because it helps you evaluate your overall betting strategy. Because if you are on a roll and you make a profit of 20% on £100 bets, it is important to increase your bankroll, in other words, the amount of money you set aside for betting. This is because your betting strategy will produce the same percentage, regardless of your bankroll.
How Do You Calculate Return on Investment?
The first thing to do is to calculate your net profit. Once you have this, you can use this common formula:
ROI = (net profit / cost of investment) x 100
Additionally, you can use one of these formulas:
If you make a profit:
ROI = [(the total return / total amount invested) -1)] x 100
If you make a loss:
ROI = [1 – (the total amount invested / total return)] x 100
What Is a Good ROI in Horse Racing?
We all want to get the best ROI possible. And this is a question that many bettors will ask, but the reality is that bookies usually like to keep this information to themselves. There are some people who talk about high percentage ROIs, for example over 30%, but the reality is that if you want to be realistic, the typical ROI is usually between 5% and 10%.
What Should You Do If You Have a Positive ROI?
Depending on your frequency of betting, getting a positive ROI will either make you want to invest more or quit while you're ahead. For example, if you manage to get a positive ROI of 20%, and you bet small amounts over the course of four months where you have invested a total of £1,000. You will now £1,200 (a 20% positive ROI), so now you have to decide what to do. You could do one of the following:
- Withdraw your net profit.
- Leave the profit on your betting account so you can increase your bankroll.
- Add more money to create a larger bankroll.
- Withdraw all the money.
This is where it is all down to you. With these four options, you've got to assess your level of risk. A good horse betting ROI is something we’re all after. Depending on what you want to achieve, you could do one of the following:
- Withdraw all your funds if you want to take a break from betting.
- Withdraw your profits only if you want to carry on betting.
- Double your bankroll if you are happy with your betting strategy.
If you want to make a solid return on investment with horse betting, learning how to make money in horse betting is about taking yourself seriously. If you want to make a profit over time, you have to view your finances as an investment. The more you can invest, the greater your return. This is why it is so important to understand your return on investment. If you want to dive deeper into it, you've got to conduct the research. You need to obtain the best odds for your bets, which will naturally increase your chances of making a profit over time.
A Good Strategy is Good ROI in Horse Racing
If you want to become a savvy bettor, you need to really understand your overall experience, get into the habit of checking the balance on your account, and place bets according to how much money is in your betting account. If you have no management strategy for your bankroll or understand what your win-to-lose ratio is, you will have no idea if you've actually made a profit. Having a solid horse betting strategy will make all of the difference. If you have a bad strategy, and you greatly overestimate your knowledge of horse racing, you can end up losing a lot of money, with minimal to zero return.
If you want to be a serious bettor, you've got to have a solid strategy. Having an ROI is not just a great way to make sure you are profiting from your betting, but you are guaranteeing that you are not going to lose every step of the way. Betting is exciting when you do it in the short term, however, the best people use their ROI as part of their overall strategy. Here, at BetAlchemist, we help people who have just started, but also anybody who is looking to have a bit more knowledge under their belts.