Value Sports Betting
Value sports betting is all about making sure that your picks are the right price / odds, in order to make a profit. If you do not do this, then you will still win bets but long term profits will not be achieved. These days, with hundreds of online sportsbooks as well as betting exchanges, profits are that much easier to attain because much better odds are on offer.
Finding value bets may often mean taking bigger odds, away from the ‘favourite’ or shorter priced end of the market. You may find that you actually lose more bets than you win but the higher prices / odds at which you bet, compensate for the losing plays.
If you bet all season long on the NY Yankees (US Baseball) or Manchester Utd FC (English Premiership) or any top team – to win each game, then you will end up with a fairly good winning strike rate but it is unlikely that you will make any money. This is not value sports betting!
The odds on these types of team will be ‘short’ and you may do better to try and predict when these teams might falter and bet against them at the over inflated prices being offered on the opposing teams. These opposing teams will most likely offer the value because they are not the popular betting choice.
Coin Flip Example
When we flip a coin, we know that the true chance of it turning up heads or tails is 50% or ‘evens’ – that’s odds of 2.0 in European odds or -100 in US odds.
Let’s set up a ‘coin flipping’ event! A neutral party starts to flip the coin. With each subsequent flip there is a definite preference for heads in the betting. The bookmaker or sportsbook takes this in its stride, he has already set the odds at 1.91 (-110 US) for either outcome which takes into account his commission. He knows that this trend is fairly usual as heads is often favored in this type of event. He decides, however, to balance his books a little by reducing his odds on heads to 1.83 or -120 and increasing tails to odds of 2.0 or -100.
Heads is now an even shorter price and represents no value. Tails now stands at a slightly better price but still only represents the ‘true odds’ or likelihood of winning at 1/1 or 50% and so is not value.
The event continues and still the betting favors heads. Why? Well the ‘average bettor’ does not really understand ‘value’, he does not understand that heads might well be a bad bet or hold no value. He just enjoys betting and since ‘heads’ is winning, he wants to bet on heads!
The bookmaker balances his books again with a dramatic shortening of the odds for heads, to 1.57 or -1.75 and a lengthening of the odds to 2.5 or +150 on tails.
At this point the knowledgeable bettor steps in and begins to place bets on tails. He knows that he has got value at 2.5 / +150, for an event where the ‘true odds’ of success are always ‘evens’. The bettor is now getting value on his bets.
As long as he bets at this price (2.5 / +150) or any reasonable ‘value’ price, the bettor will win in the long run.
It is not always easy to assess the ‘true odds’ in sports betting events because there are so many variables, however, with experience it can be done, especially if one specializes in particular area.
The Expected Value formula is a useful tool for helping to calculate value, it can show you how much you can expect to win per bet and, to a degree, whether or not a bet should be made.
At its core, Expected Value, is the amount a player should win or lose, if they place a bet at the same odds over and over again. You have to multiply your probability of winning by your potential winnings on each bet, then take away the probability of losing, multiplied by the amount lost on each bet.
(Probability of Winning) x (Amount Won per Bet) – (Probability of Losing) x (Amount Lost per Bet)
A simple example of Expected Value (EV) put into practice – if you were to bet £100 on on a coin toss, and you were to receive £110 every time you got it right, the EV would be 5.
This means that if you were to make the same bet on heads over and over again, you can expect to win an average of £5 for each bet of £100, in the long run.
A look at the formula in action. The probability is a number between 0 and 1. So using the coin toss example where you have a 50% chance of either heads or tails – the probability would be 0.5.
(0.5 x 110) – (0.5 x 100) = 5
A real world sports betting example of a match between Liverpool and Arsenal:
Liverpool 2.14 Draw 3.6 Arsenal 3.7
A bet of £100 on Arsenal would give you a potential profit of £270.00 and the probability of it happening is 0.27 or 27%.
The probability of the Arsenal win not occurring is the sum of Liverpool and the draw or 0.47 + 0.28 = 0.75.
The formula would then look like this:
(0.27 x £270) – (0.75 x £100) = – £2.10
The EV is negative for this bet, suggesting that you will lose an average of £2.10 for every £100 staked.
A negative EV doesn’t necessarily mean that you’re going to lose money. Unlike a coin toss, which we know is a 50 / 50 chance, betting on sports is a subjective thing. The odds in the above example could be wrong on the draw or on either Liverpool or Arsenal.
Try to work out your own probability for a match – these might differ from the implied odds – and if you have a positive EV, then this will give you an excellent chance of being in profit in the long run. If you decide, for instance, that Arsenal’s chance is not 27% but 35%, and you are correct, then this will give you an edge.
Ultimately, many people won’t use EV. Experienced punters often just rely on instinct, so there is no need to get too carried away with formulae. If the price ‘leaps off the page’ at you, then it might warrant further analysis. Is there a reason for the price standing at the level it is? Are players on an opposing team suspended? Late injuries? Perhaps the price is just a good price. Remember that bookmakers are primarily concerned with attaining equal action on their book, so prices can be ‘wrong’.
Good luck in finding your value.