To be profitable in sports betting, staking strategy is as important as finding value odds. With many progressive betting systems, such as the Labouchere betting system, promising almost infinite wealth, are they a good idea to follow? Here’s the academic answer to the question.
The Labouchère staking system is a progressive staking method acording to which a bettor continues to bet until a particular winning amount is reached, and is traditionally used for Roulette.
The Labouchère staking method in sports betting
Labouchère can be easily extended to sports betting and the steps involved in applying this staking method are the following:
1. Decide how much money you want to win. Let's aim, for example, to win $100.
2. Determine how you will split this money. Say you split it up over five values: $10, $20, $40, $20, $10.
3. Place a bet that would win the sum of the first and last numbers. If the European/Decimal odd is 3 (+200American/MoneyLine) for example, you would stake $10, so as to win $20 back (the sum of the first and last number).
4. If you win, you tick off the first and last number. Otherwise, you add the amount of the stake you made, so that you need to win this back. In this case, you would have $10, $20, $40, $20, $10 and $10.
5. Repeat steps 3 and 4 until you win the amount you are aiming for.
The rationale behind this strategy is that you tick two items off the list when you win, but you only add one; so you are ticking it faster than you are adding. Below I discuss why this doesn’t make sense.
To recommend or not to recommend?
While it is fun to deal with, I would not recommend any progressive staking methods. In essence, they suggest you bet and bet until you win the desired amount, without heeding the amount you afford to bet. Let ‘s assume you are betting on even odds and have a run of four losses. The next bet would then be $50, even if you had already lost $100.
Unlike the Kelly Betting strategy, no consideration is taken to the size of the portfolio.
It is important to remember that the key decision in sports betting should be whether the odds represent value, rather than how much can be won.
A similar progressive system is the Fibonacci strategy, where you increase your betting stake according to the Fibonacci sequence 1, 1, 2, 3, 5, 8, 13, 21 etc.
The academic answer
From an academic perspective, there have been three good papers discussing the use of this strategy to bet on draws. In 2007, Archontakis and Osborne stated that betting on draws at an odd of 3 using a Fibonacci Strategy would result in wins, if applied to World Cup Finals data.
Yet they didn’t use real data, so another team of researchers focused on real odds for draws and simulated the results (Is the soccer betting market efficient? A cross-country investigation using the Fibonacci strategy). They found that in 95% of the cases, the worst case scenario is to have to stake up to 43, if the Fibonacci strategy is used.
More recently, however, Lahvička debunked the theory of succes behind these methods by finding that all tested versions of this strategy eventually result in money loss. I would expect any progressive system to provide similar results.
So, tread on with caution. Progressive systems are fun, but only while the fun lasts.