ROI In Horse Racing
I received a question from someone new to betting on horses.
They had seen me refer to ROI and wondered what that meant.
Quite simply ROI stands for Return on Investment.
It is a way to measure the profitability of a set of betting selections
whether they be your personal picks, system selections or a tipsters tips.
A complete mad gambler is unlikely to care about such things.
If however you have a more investor style attitude to your betting
ROI figures give you a very good measure as to whether a method is worth following or not.
Let’s do a few quick examples.
Assume you place 100 bets of £100 each
The total you have invested is 100 * £100 = £10,000
For arguments sake let’s say your bets do well and the total return to you is £12,000
( ie £10,000 original stake and £2000 profit )
Your Return on Investment ( ROI ) is therefore £12000 / £10000 = 1.2
Normally this is expressed as a percentage
As a percentage 1.2 is 120%
This time let us assume the betting has not been so good and has lost some money.
Again we have 100 bets of £100 each for a total investment of £10,000
The return this time is less than staked.
We only get £7000 back.
So ROI = £7000/£10000 = 0.7
Or expressed as a percentage 70%
From the above you can see that the breakeven mark is at the line of 1.0 or 100%
ROI above 100% is good
Below it is bad
Profit on Turnover
POT or Profit on Turnover is an alternate measure of betting profitability.
Here we look at net profits as opposed to net return ( return includes original stake )
Using the same data from the two examples above
1 – POT = £2000 / £10000 = 0.2 or 20%
2 – POT = -£3000 / £10000 = -0.3 or -30%
Note how when using POT 0% is the line of breakeven.
Also note that POT can be positive or negative.