How Loss Aversion Affects NFL Bettors When They Lose bets in the 4th Quarter

In another scenario, same game, same spread, Kansas City fumbled at the 20. When they did, the Cowboys scored. The final score is Chiefs by 4, and you did not win. 

The difference between the emotions you feel when you win and when you lose has a name.

Caption: An abstract representation of loss aversion in betting

Definition of Loss Aversion

Loss aversion is a feeling many experience; most just don’t have the right word for it. Simply put, it hurts deeper to lose than to win. The emotion is stronger when you lose than when you lose. 

Every time I win $100, I am happy. When I lose $100, I feel worse. Now, when you try to equate the “happiness” and the “sadness,” the latter is heavier. ^[1] This pain of losing has been proven to be a driver of decision-making, and it’s rampant in betting. Whether this is making decisions about how much to bet on slot machines, when you're betting on the NBA or any other type of wager like NFL betting. ^[2]

The Pain of Loss vs. The Joy of Gain

Here’s something I realized about these two, starting with the joy of gain.

Whenever I win, I celebrate. But after a while, that excitement dies down. The pain of loss vs the joy of gain hits different. When I lose, I ruminate on what I would have done differently. I constantly ask myself a lot of "Should've, could've, would've" questions and run through multiple what-if scenarios. And in no time, that feeling has lingered longer than it should.

The Emotional Bankroll Problem

Money does not equal emotional bankroll. Your emotional bankroll is how you feel (and think) right before you place a bet. When you lose late, it hurts more than if it happened earlier. This hurt is sometimes accompanied by feelings of guilt.

One time, I lose 3 times at the beginning of a game. And in another game, I lost a bet with 90 seconds left until the final whistle. This last scenario had me questioning if online betting is really something I should be doing. 

Many bettors find themselves in this predicament as I did. And unfortunately, some can’t resist the “one more time” voice inside their heads. In an attempt to “recover” in this state of mind, when placing another bet, your emotions can get the best of you.

Enter Recovery Betting: Where It All Breaks Down

You placed a big bet, over $500, and you lost it. Then you go ahead and even place a bigger one, hoping to recover what you've lost and what you’ve just invested. If you are lucky, you win, but you can also lose again. Sometimes this cycle gets destructive.

This cycle of betting to recover is called recovery betting. 

Recovery betting has 3 consequences that only add risk, minus the guarantee of winning. You:

1. Bet more money
2. Wager on bets with higher odds
3. Bet often ^[3]

This cycle clouds your mind that you are having debt you can pay off, while essentially, you are draining your resources to keep things moving.