Research on betting frequency and long-term profitability highlights the interplay between skill, transaction costs, volatility, and wagering strategy. While high-frequency betting can, under certain conditions, maximize expected terminal wealth (van Loon, 2021), it does not always yield optimal performance due to factors such as variance, market inefficiencies, and cognitive biases (Hsieh et al., 2018). Frequent bettors tend to make smaller wagers relative to their bankrolls and, as a result, lose a smaller proportion of their total funds compared to less frequent bettors, suggesting a potential risk management advantage in higher betting frequencies (Gainsbury et al., 2013). However, this does not necessarily translate into greater profitability, as smaller bet sizes may also limit returns.
In financial markets, the optimal frequency of investment decisions varies across different environments and may change over time, reflecting the need for flexible strategies in betting markets as well (van Loon, 2021). The Kelly Criterion, a widely studied approach to bet sizing, advocates for larger wagers that maximize long-term wealth growth but comes with increased short-term risk (MacLean et al., 2010). This trade-off highlights the importance of balancing bet frequency with risk tolerance. Additionally, newer betting markets may offer temporary inefficiencies that skilled bettors can exploit (Woodland & Woodland, 2001), though such opportunities often diminish as markets mature. Decision-making in gambling contexts is influenced by multiple psychological and economic factors, with individuals often prioritizing gain frequency over expected long-term outcomes (Horstmann et al., 2012).
Overall, while increased betting frequency may enhance bankroll longevity and risk management, it does not inherently improve profitability. Success depends on bet selection, market conditions, and an individual’s ability to manage risk effectively. Betting strategies should be tailored to account for both the structural characteristics of the market and the bettor’s financial constraints, as neither high nor low frequency alone guarantees long-term success.
Frequent bettors tend to make smaller wagers relative to their bankrolls and, as a result, lose a smaller proportion of their total funds compared to less frequent bettors, suggesting a potential risk management advantage in higher betting frequencies
Summary of: Gainsbury et al, 2013
Anecdote
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Articles Cited
- “Ronald J. M. van Loon (2021): Long-Term Investing and the Frequency of Investment Decisions, https://doi.org/10.3905/JPM.2021.1.262
- The paper analyzes the impact of investment decision frequency on long-term returns, deriving the minimum skill required for positive expected returns, the optimal frequency, and the relationship between frequency and long-horizon value-at-risk.”
- “Sally Melissa Gainsbury, Saalem Sadeque, D. Mizerski, A. Blaszczynski (2013): Wagering in Australia: a retrospective behavioural analysis of betting patterns based on player account data, https://doi.org/10.5750/JGBE.V6I2.581
- The study analyzed player account data from a large Australian wagering operator over 10 years to investigate the characteristics and betting patterns of account holders, finding that more frequent bettors made smaller bets but bet greater total amounts and lost smaller proportions compared to less frequent bettors.”
- “Annette Horstmann, A. Villringer, J. Neumann (2012): Iowa Gambling Task: There is More to Consider than Long-Term Outcome. Using a Linear Equation Model to Disentangle the Impact of Outcome and Frequency of Gains and Losses, https://doi.org/10.3389/fnins.2012.00061
- The paper proposes a linear equation model to analyze decision-making in the Iowa Gambling Task, which allows for disentangling the influence of long-term outcome, gain frequency, and loss frequency on participants’ choices.”
- “Chung-Han Hsieh, B. Barmish, J. A. Gubner (2018): At What Frequency Should the Kelly Bettor Bet?, https://doi.org/10.23919/ACC.2018.8431224
- The summary of this paper is that it studies the problem of optimizing the betting frequency in a dynamic game setting using Kelly’s expected logarithmic growth criterion as the performance metric, and provides insights into how the optimal performance changes with the betting frequency, the effects of accrued interest and transaction costs, and conjectures about the conditions under which low-frequency betting can match the performance of high-frequency betting.”
- “Chung-Han Hsieh, J. A. Gubner, B. Barmish (2018): Rebalancing Frequency Considerations for Kelly-Optimal Stock Portfolios in a Control-Theoretic Framework, https://doi.org/10.1109/CDC.2018.8619189
- The paper examines the problem of portfolio weight selection to maximize expected logarithmic growth, with a focus on the impact of rebalancing frequency, and shows that if there is an asset satisfying a certain dominance condition, then an optimal portfolio consists of this asset alone, rendering the problem of rebalancing moot.”
- “R. Quandt (1986): Betting and Equilibrium, https://doi.org/10.2307/1884650
- Racetrack betting is a simple investment situation where individuals invest money for uncertain returns, and the paper discusses various aspects of this, including the relationship between objective and subjective probabilities of winning, risk-loving behavior among bettors, and the efficiency of the betting market.”
- “L. Woodland, Bill M. Woodland (2001): Market Efficiency and Profitable Wagering in the National Hockey League: Can Bettors Score on Longshots?, https://doi.org/10.2307/1061582
- The National Hockey League betting market is found to be somewhat inefficient, and simple wagering strategies can result in profitable returns, as bettors tend to overbet favorites relative to their observed chance of winning, and the market does not appear to be converging to efficiency.”
- “L. MacLean, E. Thorp, W. Ziemba (2010): Long-term capital growth: the good and bad properties of the Kelly and fractional Kelly capital growth criteria, https://doi.org/10.1080/14697688.2010.506108
- The Kelly criterion has both advantages and disadvantages: it maximizes the limiting exponential growth rate of wealth, but its suggested wagers may be very large and risky in the short term.”
Insufficient Detail?
At times it is difficult to answer the question as there are not enough relevant published journal articles to relate. It could be that the topic is niche, there’s a significant edge (and researchers prefer not to publish), there is no edge or simply no one has thought to investigate.
