Is it worth paying for the betting tips of a Tipster?

Although it’s not the general rule, there are some very good tipsters out there that can help you make money on a constant basis, with the logical ups and downs. However, before selecting one or more, we should first answer these questions:

1. Do I have enough time to investigate about one or more sports and bet on my own? And if I have it, has my bankroll grown with certain consistency? I’m sure there are exceptions but, in general, if you don’t have several hours a day to make your research, it is very difficult to cross beyond the “recreational bettor” line. The best tipsters spend many hours in front of their computers analysing all the available information, looking at odds, etc.

2. Is my bankroll high enough so that I can afford paying a fee for the tips of a tipster? The answer is not so obvious. Let’s see it with an example:

Let’s assume our initial bankroll is 1,000 eur and we are thinking about paying for a tipster who has a record of 1,200 picks (average of 50/month), a yield of 8.0% and an average stake of 2% of bankroll. Every tipster has his own money management strategy. Anyway, I don’t suggest betting in average much more than 2% of your bankroll. Only if average odds are low you can do it. If we assume the tipster will keep on providing a 8% yield in the long run, our potencial monthly earnings will be:

Potential earnings =

Initial Bankroll x avg. Stake x number of bets x Yield

for our bettor: 1,000 € x 0.02 x 50 x 0.08 = 80 eur

If we take out the 50 eur subscription fee, the profit drops to 30 eur. Therefore we are giving away 62.5% (50/80) of the potential profits. It’s clear that the bankroll of this bettor is too low to pay for a tipster. We obviously don’t know which will be the future yield, but a punter must make these calculations. He must make an estimation of the yield he might achieve in the long run with that tipster and then decide if it’s worth paying for him or not.

In the following table you can see what percentage of the potential profits are eaten by the tipster subscription fee, subject to 2 variables: the bettor initial bankroll and the potential yield. We have assumed a 2% average stake and 50 bets/month in a fixed bankroll strategy; that is, we don’t update our bankroll after every bet. If the punter decides to take more risk and bet on average a higher stake, his potential profit is higher . However, the bankruptcy risk it’s higher too and a bad run can put him out of the business. We have made this study for 2 different monthly subscription fees, 50 € and 100 €.

Deciding what maximum stake of our potential earnings is going to be aimed at paying for the monthly fee is a very personal decision. There isn’t an only answer. I would suggest not to devote more than 1/3. The reason is that any downward deviation in the yield means that our profits, if any, evaporate. Moreover, we should take into account that nearly always the published yield figure is higher than the bettor’s real one because the latter has generally access to lower odds.

To sum up, your bankroll must be high enough so that it can withstand the tipster fees. If it’s too low the tipster will have to provide you with very high yields so that the sums add up, what it might be very difficult to maintain in the long run.