Outcome Bias & Your Betting Process

Outcome Bias

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If you’ve dipped your feet into the waters of online sports betting at the top sportsbooks, then you’ve probably come across lots of different terminology, such as ‘Outcome Bias’, which is exactly what we’re here to talk about.

Learning about Outcome Bias in Sports Betting 

OK, let’s start with the basics and look at what outcome bias is. Outcome bias is a way of judging a particular decision based only on the result of the decision, as opposed to judging the process behind the decision. 

  • For example, let’s say you decide to go out for a long walk, and let’s also say that you notice rain is forecast, so you choose to take an umbrella with you, just in case the rain comes while you’re out. You walk for one hour, and the sun shines the entire time brightly, thus rendering the umbrella useless.

    Many people would judge their decision to take an umbrella as a poor one simply because the rain didn’t arrive, when in reality, the decision-making process behind taking an umbrella was sound. It could easily have rained; there was the potential for rain in the weather forecast, so it was wise to carry an umbrella as a precaution. 

In our example, the decision to take an umbrella was far from a bad decision, just because it didn’t rain while you were outside. The principle can also be applied to sports betting. Many bettors make the mistake of judging their bets solely on the outcome. 

Are Losing Bets Bad Bets? 

Is a losing bet a bad bet? Many bettors would answer with a resounding yes. However, this is just not true. 

It’s easy to assume that all losing bets are bad bets, while it’s also super easy to believe that all winning bets are good bets. This really is how most bettors think, and this is part of why most bettors are losing bettors in the long run.

Nobody wants to lose, but losing is a big part of sports betting, whether we like it or not. The most successful sports bettors on the planet all place losing bets. Anybody who says that they don’t is either lying or wrong. Whether you're betting on soccer or the NFL, losing is something that you must accept and learn to live with. 

A loss does not automatically equal a bad bet. Or rather, a loss does not equal a bad bet purely because the result was a negative one. In other words, not all losses are bad bets by default. 

It’s All About Value

A serious bettor, as in a bettor who wants to make a profit long term, does not think in terms of finding winners and losers. A serious bettor thinks in terms of finding value, which is to find bets that are priced at bigger odds than they should be. Therefore, a bad bet is not a losing bet, but a bet that represents a lack of value (priced shorter than it should be). As a result, both winning bets and losing bets can be bad bets. 

See the table below for examples of bets that represent positive value and negative value, often referred to as “+EV” and “-EV”. 

ScenarioValueResultVerdict
Ideal+EVWinGood Bet
"Right" Loss+EVLossGood Bet
Lucky Mistake-EVWinBad Bet
Expected Failure-EVLossBad Bet

The table above shows that it’s far more about the process and the decision-making rather than the raw result. To say that the ‘Lucky Mistake’ scenario is the better of the two scenarios just because the result was positive would be wrong.

In the long-term, a +EV bet is far more likely to succeed. To clarify, the outcome of a wager, the result, is not what makes it good or bad. Good bets are bets that represent positive value for money (odds bigger than they should be), while a bad wager represents negative value for money (odds smaller than they should be). 

Tailoring Your Betting Process

Developing your process to avoid falling victim to outcome biases is key to long-term success. Remind yourself that individual results do not dictate the long-term picture, and always remember that the outcome of a bet does not determine whether the bet was a good bet or a bad bet. 

Short-term results represent little more than natural variance, which means that even the biggest value bets can lose, but consistently betting only when you believe value exists allows you to paint a bright long-term picture. 

You need to ensure that your goal is to bet value and not bet winners. Take the time to reflect on each bet that you place. Don’t focus on the result; question the process behind the decision to place the bet instead. Doing so will allow you to better evaluate your performance as a bettor. 

As part of your betting process, you should constantly tell yourself that you are going to lose bets. Some of your losing bets will indeed be good bets. Some of the best bets you place from a value-identification and all-around decision-making point of view will lose. That’s simply the nature of the beast. 

Build these key factors into your process to avoid being hurt by outcome bias: 

  • Learn about value and its importance 
  • Make finding value bets your goal instead of predicting outcomes 
  • Judge bets based on the entire decision-making process
  • Avoid letting results/outcomes cloud your judgment 
  • Don’t get hung up on individual results
  • Focus on the long-term 

The most important thing to remember is that as long as you understand that a loss is not automatically a bad bet because of the result/outcome alone, you’re on the right track.

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