A good number of sports bettors never measure the exact value of wagers in the form of their Expected Value or EV, instead they take into account what they think about the possible returns. For instance, try rating how important are the following increases when it comes to your chances of winning £ 1 million:

a) Increase from 0% to 5%

b) Increase from 5% to 10%

c) Increase from 60% to 65%

d) Increase from 95% to 100%

Although each one of the above provided options has the same change in terms of quantity, a 5% increase, they deliver different impressions in terms of their quality. Put another way, each one of these options leads to a distinct emotional reaction.

While the choice A takes you up from having zero chance of winning £ 1 million to having some chance at least, despite being a pretty small one (with a 0.05 probability), moving into the territory of a slight possibility can prove to be a crucial trigger, and generate a positive emotion. This type of feeling is referred to as the possibility effect, causing a good number of gamblers and sports bettors to overweigh the long shots. It’s also the main driving force behind the lottery business wherein investing a small amount gives one a chance of winning a huge sum of money.

Coming to the choices B and C, and they deliver a far less dramatic impression. Despite the fact that in case of these choices your chances of winning £ 1 million actually get doubled, they don’t have the kind of qualitative impact that’s there in choice A, hence, not they don’t push the same mental buttons.

In case of choice D, the possibility of the outcome, that is winning £ 1 million becomes a certainty at 100%, leading to the inverse of the possibility effect, referred to as the certainty effect. It implies that in situations where there is absence of Expected Value calculations, the outcomes which are closer to certainty, are normally under-weighed compared to their probability.

Regardless of knowing the benefits of weighing different probabilities, sports bettors have a tendency of betting on Team A instead of Team B, just because they perceive it to be a more likely occurrence, not due to any superior value calculation. In addition, many studies have revealed that the objective usage of probability for assessment of outcomes and declines in situations where in the subject matter evokes some vivid emotional response or representation of a certain outcome, or how et is phrased requires specific focus.

Talking about in relation to the lottery example that were discussed above, we are sure that all of us have had this idle discussion – “How would you respond and what would you do in the event that you win a lottery?” It’s a very good example of creating a vivid fantasy of some highly unlikely outcome. It inevitably results in you overweighing the probability of winning a jackpot.

It’s exactly due to the very same reason it’s bad idea to bet on your favourite player or team, as the emotional attachment you have with him/them generates vivid projections of such highly desirable outcome/s, that is like overweighing the probability or thinking a ball into the net.

Whenever a sports bet is worded accurately, you’ll find it much easier to make sound EV or expected value calculations, which will be explicitly worked out or estimated far correctly. As a result you will be able to more accurately weight the probability, bringing it closer to the actual probability of the match. However, there are some subtle variations in which bets can be phrased, which can make a huge difference to how they are interpreted.

For instance, looking at the outright betting markets, those bets can be phrased either in the following manner: Field vs Player A, all with a long list comprising of all participants including the Player A, for instance, Player A: 4.120, Player B: 8.634, Player C: 10.542 and so on.

While the first option provides a fairly simple presentation of Player A’s task, leading to a cognitive overweighing of his success probability, in case of the second option, even though the probability is exactly the same, it seems like a far more daunting prospect, just because of the opponents to be overcome by Player A are clearly listed out. It results in an underweighted assessment of his chances.

In a similar manner, focuses equally important when it comes to misjudging probability. You may frequently come across the following types of bets:

Odds Yes / Odds No

Will Player B Score a Goal?

Odds Yes / Odds No

The judgements of sports bettors are normally overweighed when they’re focused on every option in isolation, compared to both the questions combined as follows:

Odds Yes / Odds No

A study carried out in the year 1999 by the late psychologist Amos Tversky in collaboration with Craig Fox, clearly shows this. They had asked some US basketball fans to ponder and assess the actual individual chances of eight quarter-finalists who had made it to the NBA play-offs.

It was noted that the judgements that are made without proper calculations often result in underweighting of probabilities.

As the entire focus was on assessing individual chances of each team, one at a time, and owing to the fact that in them being hard-core NBA fans, they were prone to generating vivid impressions of every team, the worked out aggregated probability of the outcomes was majorly overweighted at a whopping 240% for those eight teams. Obviously, the actual figure should’ve been 100%.

On the other hand, when they were asked to only assess the possibility of a winner from the Western Conference or Eastern conference, the probabilities came very close to an impressive 100%. A major reason was that these two options were equally specific and generated comparatively less emotional response.

Let’s talk about a betting coup carried out by two popular punters in the year 1991, which came to be widely recognised as the hole in one gang. The school clearly illustrated how making judgements without using proper calculations and how one’s inability of visualising a rare event, results in underweighting of probabilities.

This pair carried out intensive analysis of the statistics and thereafter calculated that in the possible odds of getting a hole in one in the European golf tour event was around 2.25. They used this knowledge, toured the entire country, specifically targeting the independent sports books and requesting certain odds for hole-in-one occurrences in televised golf tournaments. Please note, the operations on the small scale never had any sophisticated risk assessors, so they simply relied on their intuitive judgements.

Sports books were of the opinion that hole-in-ones were pretty hard to come by, as they had no experience of witnessing one personally, whether first-hand or on television, more so because television coverage was pretty limited in those times and not every tee shot used to be aired. Resultantly, the courts provided by them are ranged from 4.00 to 101.00! This was an excellent example of underweighting rare events.

A major golden rule you must follow in any gambling activity is that your beds should always be assessed based on their expected value, which is the average of each outcome weighed based on its probability.

Unfortunately, sports bettors have a tendency of assigning weightages to betting options depending on how the feel emotionally about those probabilities, leading to possibility and certainty effects, that can prove to be very costly.