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It's not a simple yes or no answer on whether you should bet on the favorite in a given matchup. It's a matter of value. If you think a favorite is being undervalued by the oddsmaker, then you should consider betting on that team.
The fundamental reason why all martingale-type betting systems fail is that no amount of information about the results of past bets can be used to predict the results of a future bet with accuracy better than chance.