Win Rate vs ROI: Why Price Decides Profit
Win rate and ROI are different things, and price is why they diverge. A 60% win rate at -200 loses money while a 40% win rate at +200 profits. Here is how to think in ROI instead of record.
Win rate and ROI measure different things. Win rate is the share of your bets that win. ROI (return on investment, sometimes called yield) is the profit you make per dollar risked. Price is the reason the two can point in opposite directions.
Bettor A wins 60% at -200. Bettor B wins 40% at +200. At one unit ($100) per bet:
A: 60 × $50 − 40 × $100 = +$3,000 − $4,000 = −$1,000
B: 40 × $200 − 60 × $100 = +$8,000 − $6,000 = +$2,000
The 40% bettor is the profitable one.
Why record flatters favorites
Betting heavy favorites produces a gaudy win rate and can still lose money, because each win pays little and each loss costs a lot. Betting underdogs produces a mediocre win rate that can be very profitable, because the wins more than pay for the losses. A win rate with no price attached tells you almost nothing.
ROI is the scoreboard
ROI already folds price into the result, which is why it is the number that matters. Even ROI needs a healthy sample before it means much (see variance), but it is the honest measure of whether your bets make money.
Fairline ranks every play by edge and EV, the figures that combine win probability with the price on offer, so the board is sorted by profitability rather than by how often a bet is likely to win.