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Variance
generalThe statistical measure of how results deviate from expected outcomes over time. The reason short-term results are unreliable.
Key Takeaways
- 1Variance causes short-term results to deviate from expectation
- 2Even winning bettors experience significant losing streaks
- 3Proper bankroll management is the primary defense against variance
- 4Larger sample sizes reduce the impact of variance
What is Variance?
Variance measures how much your actual results deviate from expected results. In gambling, it's the reason why short-term results are unreliable and why bankroll management is essential.
Variance in Practice
Imagine a bettor with a 55% win rate at -110 odds:
- Expected profit per 100 bets: +$5 per bet × 100 = +$500
- But actual results over 100 bets could range from -$2,000 to +$3,000
- Over 10,000 bets, results converge toward the expected value
The Role of Sample Size
| Sample Size | Result Reliability |
|---|---|
| 50 bets | Very unreliable |
| 200 bets | Somewhat unreliable |
| 500 bets | Starting to stabilize |
| 1,000 bets | Moderately reliable |
| 5,000+ bets | Highly reliable |
High Variance vs. Low Variance
- High variance: Parlays, longshot bets, tournament poker
- Low variance: Flat betting favorites, pass line in craps
Managing Variance
- Proper bankroll sizing — More units = better variance protection
- Flat betting — Consistent bet sizes smooth out swings
- Long-term thinking — Judge results over 1,000+ bets
- Emotional control — Don't let short-term swings change your strategy