We conduct an experiment with regular sports bettors in Tanzania to investigate how they value their
bets and form expectations about winning probabilities. By comparing a sports bet to a neutral urn-and-
balls lottery with identical odds, we find that subjects under the sports framing assign higher subjective
values (certainty equivalents) to their bets and are significantly more optimistic about their chances of
winning, even though, in fact, they are not more likely to win. This is consistent with bettors being
overconfident in their ability to predict sports outcomes. Coupled with data on betting frequency and
motives, our results suggest that, by leveraging gamblers’ overconfidence, sports betting magnifies their
financial losses.