This (fictitious) story is the perfect illustration of the way many bettors treat their winnings:
A couple is honeymooning in Las Vegas and decides to set aside $500 to gamble in the casino. They spend a nice night at the tables but end up losing their $500.
So they head back to their hotel suite but the groom just can’t get to sleep. While tossing and turning he spots a $10 chip on their hotel room floor. His wife is already fast asleep so he decides to try his luck one more time and head back down to the casino. A roulette wheel catches his eye and he decides to bet his last $10 on the date of his wife’s birthday.
He gets lucky and wins at the big odds!
Then he puts all of his chips on the number of his own birthday and somehow wins again!
He bets on…. I think you get the picture. He enjoys the most unbelievable run of luck and ends up sitting there with $500,000 in chips and a large crowd gathered around him to watch every bet.
Giving in to the adrenaline surge and the pressure of the crowd’s urging he goes for the biggest bet of his life.
“One more bet to win a cool million and I’ll never have to work again,” he thinks.
He places $500,000 on black.
The crowd goes away even quicker than they had gathered. The groom trudges back up to his room in silence and shock. Again he struggles to sleep.
The next morning he mentions to his wife that he had gone back down to the tables after finding a chip under the chair. She is still half asleep but asks how he went with the lucky chip.
“Not too bad,” he says, “I lost $10”.
Behavioral economists have identified a trait known as ‘mental accounting’. It is the tendency for people to treat money differently depending on where it has come from. It is common to treat money won differently to money we have earned by more traditional means. Most people are far more willing to risk (and squander) money we have won because we see those dollars differently to money earned from our job. This can lead to irrational behavior which can be very detrimental for sports bettors trying to be sensible with their betting money management.
To relate it back to the story above, if the groom had started the day with $500,000 of his own money it is impossible to think that he’d risk it all on one bet.
Most bettors struggle to be honest with themselves and others in assessing their betting results. Telling your partner that you “probably broke even” invariably means you actually lost.
Professional bettors are able to treat money the same no matter where it came from. Betting is their business so they look upon dollars ‘won’ exactly the same as dollars ‘earned’. They don’t get over-excited or complacent when they have just had a great run. Key to successful money management is a betting plan. You should put some time into thinking about how you are going to treat your winnings and what you plan to do with them. That should help you value that money just as much as you do any other cash you have.
Develop this betting mindset and you’ll be taking a big step on the way to becoming a successful bettor.