The Favourite-Longshot Bias: Why Backing Underdogs Isn't as Smart as It Seems

Picture this: you're looking at the NRL weekend fixtures and see the Wests Tigers paying $15 to beat the Penrith Panthers. "What a payout!" you think. "If I just hit one of these longshots, I'll make a fortune."

Sound familiar? You've just experienced the favourite-longshot bias – one of the most costly psychological traps in sports betting.

What is the Favourite-Longshot Bias?

The favourite-longshot bias is an observed phenomenon where on average, bettors tend to overvalue "longshots" and relatively undervalue favourites. In simple terms, punters consistently overestimate the chances of big underdogs winning while underestimating the value in backing favourites.

This isn't just a minor quirk – it's a systematic error that costs recreational bettors millions of dollars every year.

How It Works in Practice

Let's look at a typical AFL match-up:

Richmond vs Gold Coast

• Richmond: $1.20 (83% implied probability)
• Gold Coast: $4.50 (22% implied probability)

The favourite-longshot bias suggests that:

• Gold Coast's true chances are probably closer to 15-18%, not 22%
• Richmond's true chances are closer to 85%, making them better value than the odds suggest

The Result: Over time, backing longshots like Gold Coast loses more money than backing short-priced favourites like Richmond.

Why Our Brains Love Longshots

The Big Payout Fantasy

That $4.50 payout looks incredibly attractive compared to Richmond's $1.20. Your brain focuses on the potential windfall rather than the probability of actually winning.

Lottery Ticket Mentality

People often give more weight to the potential outcomes that are more unusual or unexpected, rather than the more probable ones. We dream about the massive payout, not the likely loss.

Underestimating Probabilities

Most punters struggle to accurately judge very low probabilities. The difference between a 5% chance and a 15% chance feels minimal, but it's actually massive in betting terms.

When Longshots Might Have Value

The bias doesn't mean longshots never offer value, but you need compelling reasons:

Information Advantages

• Late injury news not reflected in odds
• Weather conditions that dramatically favour the underdog
• Motivation factors (dead rubber vs finals implications)

Market Overreactions

• Short-term overreaction to recent poor form
• Public sentiment heavily favouring the favourite
• Line movement that's gone too far

Specific Sports or Situations

Some sports or bet types are less affected by this bias, though they're rare in mainstream Australian sports.