Understanding Sports Betting Psychology

About Hot Hand Phenomenon

About the Hot Hand phenomenon
If you carry out some research into the Hot Hand phenomenon you’d understand that the term Hot Hand actually originated from basketball wherein the probability of a player hitting a free throw is considered much higher if he had scored a hit rather than a miss in his previous shot. When it comes to sports betting, this term is often used for describing a sports bettor who has a good winning record. However, is there any scientific backing to this mysterious Hot Hand phenomenon?
A research was carried out in this regard by Nigel Harvey and Juemin Xu at the University College, London. They had thoroughly investigated this phenomenon by going through the betting history spanning over 700 different players who had placed as many as 565,915 bets between them, over the entire 2010 betting season.

What happens when luck favours you heavily?
These researchers thoroughly examined and studied the phenomenon of winning runs in the field of sports betting by carrying out a fair assessment of the winning probability after varying lengths of past wins.
The winning probability was found to be 0.48 in their first random sample of sports bets. After carrying out a fair examination of the following bets of the same players, the chances of winning player scoring another win in succession was found to be 0.49. Compared to that, the chances of a losing player scoring a win was found to be 0.47.
A pattern didn’t start to emerge until the players having two consecutive wins were put under examination. In their case, the chances of scoring a third winning bet in a row increased to an impressive 0.57. On the other hand, players not enjoying a winning run showed winning chances of 0.45.
After going through the results of the following bet, players who had enjoyed three consecutive betting victories, their chances of scoring a fourth straight win rose up to 0.67. In contrast, players not having any sort of winning streak to boast about, exhibited winning chances of only 0.45.
Following the same procedure as mentioned above, players enjoying a winning streak of 5 straight bets showed a staggering rise in their winning chances to 0.72. Players without any sort of winning streak on the other hand showed a winning probability of only 0.45.
When the following bets were also put under examination, players enjoying a winning streak exhibited an improved probability of 0.75. In their comparison, players not having any sort of winning streak had a fairly poor probability of only 0.46.
In the end, when the players with a winning run of six straight bets were examined once again, they showed a further improvement in their chances of winning another bet. Their probability rose to an impressive 0.76. The other set of players who had no winning streak at all, exhibited a winning probability of mere 0.47 for their next bets.

Once a loser, always a loser?!
The second phase of their research focused on the losing streaks of sports bettors. The chances of winning a bet, post a losing bet were found to be 0.47, deteriorating further to 0.40 if the sports bettors had two consecutive losses. When the same procedure was repeated again, the researchers discovered that sports bettors having three losses in a row showed winning chances of no more than 0.32 for their next bet. Following the exactly same steps, these researchers discovered that these sports bettors’ probabilities of winning after scoring five, six and seven consecutive bet losses in a row, were an unimpressive 0.27, 0.25 and 0.23 respectively.
All this data strongly indicated the presence of the Hot Hand phenomenon in sports betting. However, do you think it’s actually true that sports bettors who enjoy long winning runs are consistently lucky compared to others, or it’s actually some other mysterious explanation that hides behind this facade of logic?

The actual hidden culprit!
If we look at this data from a fairly statistical viewpoint, we do understand that all subsequent results are independent from each other. Hence, it’s pretty surprising that Harvey and Xu actually managed to find evidence to support the so-called Hot Hand phenomenon!
Their research work during the next experiment revealed how the result of a certain bet impacted the odds of the next one. The mean level of selected betting odds of all sports bettors was found to be 7.72 during the first phase. However, significant changes were noticed post the first bet.
The winners strongly exhibited a tendency of selecting lower bets, with mean odds dropping down to 3.60. The trend of low risk odds continued with their consecutive wins.
The case was opposite when it came to losing bets. Sports bettors who had lost their bets on several consecutive occasions, were found to indulge in riskier odds. The mean odds figure dropped down to 0.85 after scoring straight six winning bets. That against 17.07 of sports bettors who had witnessed six straight losses.
What this experiment revealed was that sports bettors managed to create their own luck when they believed in the Gambler’s Fallacy. Consecutive winners opt for safer odds in order to not ruin their winning streak. They automatically increase their winning chances by becoming more averse to risks. The losing sports bettors on the other hand opt for riskier odds thinking that a huge win was only round the corner, thus exposing themselves to more number of losses.

The best way to gauge betting success
Now the million-dollar question – Is a player experiencing a winning streak has more chances of being profitable in the end, compared to the one without it. If we compare the total returns scored by sports bettors who experience at least one winning streak of minimum six bets in a row, with those that don’t experience any, the comparison reveals that sports bettors without a winning streak are marginally better off! The players who scored a winning streak faced an average loss of £ 1.0078 per pound bet by them compared to an almost identical figure of £ 1.0077 per pound bet placed by bettors without a winning streak.
So, there is one solid advice you must follow regardless of whether you’re experiencing a losing or a winning streak - Never believe everything that you think!