How To Actually Make Money Sports Betting (Here’s the Math)

Money Guy Show

This episode of the Money Guy Show examines the growing trend of sports betting in America, highlighting its financial risks and comparing it to

Key takeaways

• 96% of sports bettors lose money over a five-year period, meaning only 4% are net positive.
• The average loss per $100 wagered is $10.40, indicating that betting is inherently unfavorable in the long term.

Main topics

• Rise of online sports betting in the U.S. since 2018
• Financial impact of sports betting on young adults and Gen Z

Notable quotes

"If you bet on sports, on sporting events over an extended period of time, and you just break even, then you are doing better than the vast majority of sports bettors."

"For every $100 that you bet on sports, the average expected loss in 2025 was $10.40."

Conclusion

The episode concludes that while sports betting can be an entertaining hobby, it should never replace disciplined financial

Transcript preview

Speaker 2 (0:07) how you can actually make money sports betting. Yes, you heard us right. We're going to break it down. Everything you need to know. Speaker 1 (0:14) Oh, Remy, I am so excited about this because there is something going on in this country right now that's a problem. I alluded to a little bit last week, and I've thought about it over the last week. We even thought about it in show prep. And it's a problem, and it's a bad problem. And in my opinion, it's only going to get worse, and it's only going to get more severe. And I think that the headlines of the future are going to specifically call this thing that we are in right now an epidemic that is robbing from our youth. Speaker 2 (0:42) There are a lot of headlines surrounding sports betting. In the past couple of years, you've probably seen them too. We reacted to one last week on the live stream, like Beau said. And why is that the case? It's because in 2018, the United States Supreme Court overturned a federal law that prevented states from legalizing sports betting. So since then... online markets have grown rapidly. 2018, in the grand scheme of things, not that long ago. Not that long ago at Speaker 1 (1:09) all. So now Speaker 2 (1:09) we are kind of living with the consequences or the aftermath of that decision, and we're seeing it more widespread than ever. Speaker 1 (1:17) Yeah, and if you look, some form of sports betting is now allowed in 39 states, and 30 states currently allow online, so like on your computer betting, as well as retail sports gambling, like at a casino or through a sports book. So since that ruling in 2018, it's gotten bigger and bigger and bigger and bigger. And I think one of the most, I'm not going to use the curse word. I think one of the most, what's Speaker 2 (1:43) a Speaker 1 (1:43) better word than that curse word? What Speaker 2 (1:44) are you thinking? I think Speaker 1 (1:45) one of the most haunting things, one of the most devastating truths and realities is, listen to this, Americans now spend more on sports bets than movies, arts, museums, and music. Combined. All of those pastimes combined. That was the thing last week Speaker 2 (2:04) that I was very surprised about. Like, I'm used to hearing more people are doing it, but I was like, more than going to see a movie or going to a museum or like any of these other actually fun, fulfilling things. That was really surprising to me. Speaker 1 (2:16) In the year 2025, Americans placed roughly $166 billion in bets on sporting events. In 2018, it was just $6.6 billion. So that's a... 25 time increase from 2018 until 2025, it's not good. And so one of the questions, and we're trying to be unbiased here. We're trying to have a discerning mind in how we approach this. So when you see something increasing that much, when you see something going from a $6.6 billion market to $166 billion market, you want to ask the questions, okay, is there something going on here? Do people actually make money on sports betting? Is this a way that people are able to generate wealth and add to their coffers? And not surprisingly, the numbers told the truth. So Speaker 2 (3:04) let's put it this way. If you bet on sports, on sporting events over an extended period of time, and you just break even, just break even, then you are doing better than the vast majority of sports bettors. That is just the reality. So you might've clicked this video looking for ways to make. money, betting on sports, and we will show you the better approach. We are going to talk all about the better approach. I like how you worded that. The Speaker 1 (3:28) better approach to doing it. Speaker 2 (3:30) And a genuine approach because we see that a lot of people are doing this. We're going to talk more about that, why you're doing it, all of these things. We are going to talk about that, but we do want to be upfront about some of the math behind that. And one of the first things is that in a study done from the University of California, San Diego, they found. that 96 % of sports gamblers lost money over a five-year period. So that is only four in 100 people who bet at all on sports. Only four of them made any money. It doesn't say how much. It doesn't say they Speaker 1 (4:04) won big, hit a jackpot, or everything millions. It just says that after that five-year period, they were net positive on sports money. Because I have buddies and friends all the time telling me, oh, yeah, I'm actually pretty good at it. I know what I'm doing. I'd be curious, if I looked at your track record across all the dollars that you spent on sports betting, how does that play out? Because statistically, only 4 % of those people will have been positive over that five-year period. And what's even crazier is for every $100 that you bet on sports, every $100 that you place, the average expected loss in 2025 was $10.40. And just, I'm trying to, I want you to wrap your head around this, Reeves. What if I... were to say, hey, you should put money in your Roth IRA. And when you put money into your Roth IRA, you put $100 in there, from jump, from the onset, you need to just go and plan on the reality and the fact that you're going to lose $10 of that. Would you do it? Speaker 2 (4:56) I would not be doing that. No, of Speaker 1 (4:58) course you wouldn't. And yet, that's what people do. They go into this thinking, oh, I'm going to make money, or I'm going to beat the system, or I've got this thing figured out. And so the real question in my mind is not, so much how do you make money sports betting, the real question I think everyone should answer before you even wade into those waters is why are you doing it? Because this is going to be a little hot take and something that you may not expect to hear from the money guy. But we are going to advocate that if you're betting on sporting events or you're doing sports betting because it's something that's fun, it's something that you derive utility from, it's something that makes watching sporting events more enjoyable or allows you to be more engaged. I'm going to call that okay. I'm going to say that is a hobby that's an okay hobby to pursue with like a bunch of caveats. And we're going to talk about those caveats here in a moment. But if you're going into it, if you're saying, I'm going to be sports betting, I'm going to go place, this is the way that I'm going to make money. This is the way that I'm going to build wealth. Then in reality, you've already lost the plot. You're already approaching it the wrong way. If you were to walk into a casino right now and say, you know what? This is my ticket. I'm going to walk into the casino. I'm going to make money. This is going to pay for my trip. I'm going to walk out. I'm going to be more wealthy because of it. Logging into FanDuel or logging into DraftKings and approaching it that same way, I think is the exact same thing. So you're going into it right away with the wrong presupposition. If this is your wealth building strategy, you're likely doing it wrong. Let's assume for a moment that's not the case. Let's assume that you're not someone trying to build wealth that way. If that's the case, how should I approach it? How should I think about it? Speaker 2 (6:44) I'm going to echo something we've shared before. And we've been really transparent. We have financial mutants in this building that do it with that first reason and that first why. It's recreational. They love sports. They have a budget for it. Honestly, they do it. the way we're about to lay out. And I don't fault them for it because they are financial mutants through and through. They are very good with their money. They know themselves. They know their personality. And it's, I don't fault them for it. Like you said, it's more of a hobby. If Speaker 1 (7:12) I were sitting in your shoes, I'd want to know the people, the financial mutants we're alluding to, not hosts of this show. So I'm just throwing it out there. There's other folks that are, you know, out in the wings that perhaps are doing that. Not us, but they do as a hobby. And that's okay. I'm not going to fault you. on your hobby. So if you are going to do it, if you're going to think about sports betting, if you're going to like wade into those waters, how should you approach it? And the first thing we're hitting this home over and over and over again, sports betting is not a replacement for investing. These are not synonymous terms. One is not, one is a wealth building strategy, a future financial dependence strategy. The other absolutely is not. In Speaker 2 (7:54) this next stat, I'm just looking at it, and this is why we keep bringing this home. This is kind of why we're even doing this show today. Over half of Gen Z investors redirected money for investing towards sports betting just in the past year. That is kind of staggering. That's what really makes me sad about... This change and this rise of online sports betting, because this is not a replacement for investing. And if the younger generation is kind of falling into this trap, then they are setting themselves up for some disappointment, some failures, a harder path along the way. Speaker 1 (8:29) Yeah, I think what's wild is, and it doesn't say that some people are doing it. Some people are, it doesn't say some people are doing it. Some people. are trying to do this as a hobby. Some people are trying to figure out what it's like. It says they're actually redirecting funds that should be going into the Roth, that should be going into the 401k, that should be going into wealth building. And instead, they're sports betting. So if you're a Gen Z, if you're a young person out there doing that, you are doing it wrong. I don't mind being that prescriptive because that's not the way that you build wealth. Rather, we want to see you saving for the future. We want to see you saving 25 % of your gross income. And we want it going into accounts like... your employer-sponsored retirement plan, your 401ks, 403bs, 457s, your IRAs, your ESOPs or ESPPs, if you could participate in those, your taxable brokerage account, your health savings account. We want to see you putting money in those, not in the sportsbook. And if you're just doing the sportsbook and not doing those things, Speaker 2 (9:26) you're Speaker 1 (9:26) missing the boat. If you're Speaker 2 (9:27) deploying money that should be helping you follow the FOO and get through those first few steps and lay that groundwork, then that's where... You're kind of playing a dangerous game, and we would advise you not Speaker 1 (9:37) to do that. So the second thing then, okay, you're not doing that. If you are going to do it, treat it like fun money. Don't take it so seriously to where it has to win, has to work out, has to be the thing. Treat it like any other hobby. If you're someone who likes to take the weekends and you like to go play four or five hours of golf and you want to spend $100 on a golf round or $200 on a golf round or whatever, that's okay. That's a hobby. You can go pursue that. If you're someone who wants to go be an avid mountain biker and you're going to spend money, on buying the bike and doing the thing and all that. Fine. Treat sports betting like a hobby. As our buddy Charles would say, this is money that should be vacation money. This is not grocery money. And if you start spending grocery money on this again, you're doing it the wrong way. Speaker 2 (10:18) Absolutely. Uh, the third thing, or do we have anything else there? No, that's it. Yeah. The third thing is if you're going to sports bet, avoid what we would call. quote unquote sucker bets and do your research. So here's where we're going to get into a little bit of nitty gritty. You may be surprised, but there are some things that if this is your hobby, you should know. Like for example, stay away from Speaker 1 (10:39) parlays. Parlays, do you, what, you know the word parlay comes from, you don't know that. Do you Speaker 2 (10:45) know Speaker 1 (10:45) where it comes from? No, no, I have no idea. It's interesting though. You hear a lot of sports bettors talk about this. And we did the research that, okay, if you're going to be a sports bettor, if you're going to do this, what are the things that you ought to do? And it says parlays are. this idea where multiple things have to happen in order for you to win. And so a lot of gamblers love them because if these, you know, seemingly not low probability, but very low probability, we stack them up, things happen. There's a really big payoff. Right. Which sounds cool. It sounds great. It makes it Speaker 2 (11:12) exciting. But Speaker 1 (11:13) sports betting companies love them because they often rarely happen. This is why experienced gamblers or experienced bettors would call this a sucker's bet. And one study found. that, uh, when once gambling was legalized parlays, that specific type of a bet accounted for just over 27 % of the money that was wagered on sports betting. So about one in four bets were done on a parlay. However, 56 % of the revenue, over half of the revenue from betting companies came directly from this parlay. So again, if you're trying to set yourself up for success, if you want to go with the higher probability, not high probability, higher probability. Don't try to make bets, a bunch of bets with very limited information. Rather, figure out how can I make fewer bets with much better information? Am I looking at the lines? Am I looking at injury reports? Am I looking at weather forecasts? If that applies, and I'm going to try to get as informed as I can around the thing. Is this a team that I know about? Is this a team that I follow? Is this a sport that I know? Is this something I'm very familiar with? And I'm going to place. Much fewer bets on much more well-informed things rather than these random happenstance things happening that might have a big payoff. Now, remember, that does not mean that you're going to win. It does not mean that you're going to come out ahead. 96 out of 100 folks over a five-year period have less money sports betting than they did when they started. So it's already odds stacked against you. But if you're going to do it and you're going to pursue it as a hobby, you might as well try to do it in the most financial mutant way that you can. Speaker 2 (12:53) Yeah. So those are real things like avoid parlay, increase your odds, be informed, all of these things. Those are actual strategies to help you. But keep in mind at the end of the day, you're still the underdog. Even if you do everything right, you're still going to be losing money probably in the long run. Just statistically speaking, remember only four of a hundred people are actually making money when. you actually study this. So just that's the cold water. Please do remember that. Last but not least, this is where if Brian were here, he would say, know thyself probably. The last point is to be mindful of the psychological effects of sports gambling. I think this is something that gets a lot of headlines. This is where a lot of the conversation focuses on because if there's any. part of you or anything that you're seeing in your personality that tips into addiction like that's a real thing that people can struggle with you do need to like pay close attention to that because if that's you then this is not your hobby no it's kind of similar to me um maybe on a smaller scale but just like how we talk about how like credit card debt, like credit cards are okay. Credit Speaker 1 (14:00) card use credit cards. Speaker 2 (14:01) There's some really big benefits to them. It's, it's fine if that works for you, but if you carry credit card debt, that's no way never carry credit card debt. And if you're really struggling with that, then maybe credit cards aren't for you in this season, you know, and that's okay. And so I think it's the same thing. Like, even if you like the idea of sports betting, but you're seeing yourself continuing to lose money or step outside of the financial order of operations framework, or seeing yourself fall into the psychological problem, problematic side of this, then maybe this is not for you. And so you really do need to know yourself and just not be sucked in if that's you. Like that is, that is so okay. And I just want to be that voice that says that. And Speaker 1 (14:40) I think before you go into it, you have to set boundaries because most of the times with addiction, it's something that happens very gradually until it's not gradual anymore. It's no different than if you were someone who, likes having a drink or likes having a cocktail, there's not anything inherently wrong with doing that. But all of a sudden, when one drink turns into three drinks and when one night a week turns into every night of the week, you have to be mindful that this is getting into a dangerous territory. This is getting into somewhere that's unhealthy. This is now impacting other areas of my life. And sports betting is no different. So if you're going to do it and you're going to pick it up as a hobby. you ought to set some very realistic parameters and boundaries about it. Hey, I'm only going to bet on football games. Hey, I'm only going to bet a max of $100. I'm only going to, and you put these rules in place and don't deviate from those rules. And the first time that you deviate from those rules, oh, well, no, this is a big one and my boy's got this one. I'm going to bet $250. You ought to check yourself and say, uh-oh, is this getting to the place to where it's moving into that unhealthy realm? Am