Betting psychology

Anyone who gambles has had to put up with accusations at one point or another from overly concerned friends, family, or colleagues.  “Gambling is an addiction,” they say.  “Gambling is bad for you.  Don’t do it.”

There are people who gamble irresponsibly and who seem to lose all control over their behaviour.  These people do behave like addicts, and it is understandable that many people seem to perceive gambling in much the same light as a controlled substance.  But is “gambling addiction” really an addiction? 

There are literally dozens of cognitive biases that impact the decisions we make on a regular basis.  When these cognitive biases get in the way of smart gambling decisions, they can cost you money. 

One cognitive bias that you may not know about is the Dunning-Kruger Effect.

The Dunning-Kruger Effect is a tendency for unskilled individuals to overrate their abilities while skilled individuals do the opposite.

A lot of newbie sports gamblers get into betting because they know a lot about sports.  They reason that this gives them a great platform off of which to launch a betting career.  It is not an entirely unreasonable proposition.  They do have a great bedrock of starting knowledge.  But it is not enough.

To look at why, we can talk about the Green Lumber Fallacy.

When you are learning how to bet on sports, you are going to be analysing a lot of data on a daily basis.  Analysing data is not without its psychological pitfalls, and chances are good that you have already tripped into a number of them.  In other recent articles I have examined the what is confirmation bias and is it interfering with your betting and What Is the Clustering Illusion.

There is an interesting psychological phenomenon which is sometimes observed in people who are facing win-or-lose situations.  If the possibility of loss becomes imminent or even seems imminent, people experience what is known as “loss aversion” and change how they behave.

If you play or watch sports, you probably have observed this.  For example:

If you dream of becoming a profitable sports bettor, one of the first steps is to learn how to set intelligent goals.  You may think that comes later, but if you put off goal setting too long, you risk setting yourself up for failure.  Why?  When all you have are dreams of success, they tend to remain just that - dreams. 

In Tips for Setting Goals, Part 1, I gave some advice for setting your sports betting goals, including:

If you are just beginning your journey into the world of sports betting, you have a long road to walk if you want to join the sharps.  Even if you become good enough to join the pros, you will probably only have a win percentage hovering between 55-60%.  You will have to fight for every percentage.  That is how hard it is to succeed at punting.

With such a long journey ahead, how do you set useful goals which will help you succeed?  Here are some tips.

In the world of sports betting, you will encounter several common attitudes towards betting systems:

• Who needs a system?  Go with your gut.
• You need a system, but if you want to prove you are a real expert, you need to create one yourself.
• Why reinvent the wheel?  You need a system, but you may as well just borrow one from someone else.

Do you have a system for betting on sports?  If the answer is “no,” please see the article, “Why Don’t You Have a Betting System?” to understand why you should consider having one.

In the world of psychology, there are dozens of cognitive biases which can muddy up clear thinking.  These biases often act on us on an unconscious basis.  We do not notice them at work, but they distort our conclusions.  When betting on sports, those biases can cause you to make poor betting decisions which cost you money.  One such bias is known as the “clustering illusion.”