Ask any serious sports bettor to name the top five keys to making a profit over the long term and it is almost certain that value betting will be among them. The Odds Value Calculator below has been created to help you see how much value there is in any betting opportunity where you know (or can reasonably estimate) the odds available and the probability of the outcome taking place.
The Odds Value Calculator above has three data entry boxes. These are labeled Wager, American Odds and Win Probability. There is also an output panel which is labeled Expected Value. Here’s a step-by-step guide to using the calculator with relevant notes.
When all three values have been entered, the Expected Value panel will show you how much value the bet offers. This is stated in dollar terms. A positive value is a good thing. A zero value means that the odds match the stated probability perfectly. But a negative value will cost you money over the long term.
Should you wish to use the Odds Value Calculator again, simply press the Reset button to clear all data that has been entered.
To appreciate why value is so important in the world of betting, consider the scenario in which you are given the opportunity to bet on the outcome of a coin toss. There are just two possible outcomes here. The coin can end up showing Heads or Tails. That means the percentage probability of success with a single toss of the coin is 50%.
If you are offered odds of even money (1/1 in fractional, 2.0 in decimal or 100 in American odds), this will give you zero value. That’s because those odds perfectly reflect the 50% chance of success. Anyone who always bets at these true odds would expect to break even over the long term, with profits and losses canceling each other out.
Normally a sportsbook would offer you less than even money about a coin toss. Let’s say 10/11 in fractional, 1.91 in decimal or -110 in American odds. If you were to bet $100 in that situation, your Expected Value would be -$4.55. That’s because the odds offered are less than the 50% chance of success deserves.
Betting at negative value odds like these will cause you to lose money over the long term. For example, you could start with $1,000 and bet ten times at $100 each. Let’s say that you have five winners and five losers. Each loser would cost you $100. Each winner would give you a profit of $91. After ten bets, you’d therefore have $955 after betting $1,000, so you’d be $45 down.
Should you find a sportsbook offering odds of 11/10 about the same coin toss event, you’d have a positive Expected Value. Fractional odds of 11/10 equate to 2.1 in decimal and 110 in American odds. That gives you a positive Expected Value of $5.
All other things being equal, betting at positive value odds over the long term would give you a profit. Make another ten bets of $100 at these odds and win half of them. Each of the five losers would still cost you $100. However, each winner would now give you a profit of $110. After ten bets, you’d therefore have $1,050 after betting $1,000, so you’d be $50 ahead.
Because online sportsbooks need to make a profit over the long term, they try to make sure that they offer odds that are slightly less than the true chances of an event occurring would deserve. However, estimating the chances of an athlete or sports team winning is just as much an art as it is a science. This means that your opinion about an event can be quite different to that of the sportsbook, and that can help you to find value betting opportunities.
For example, let’s say that a sportsbook has two players evenly matched for an upcoming game of tennis. According to the sportsbook, each player has a 50% chance of winning, so it offers odds of -110 about each one to give themselves a little profit.
But you don’t agree that the players are evenly matched. Instead, you think that Player 1 has something like a 60% chance of winning because he loves playing at this venue, whilst Player 2 looks like he’s feeling tired. In this case, you could run the figures through the Odds Value Calculator with an intended stake of $100. In that case, you’d see that odds of -110 for a perceived 60% chance gives you a positive Expected Value of $14.55.
The key to finding value in the real world is therefore to develop your ability to assess the chances of players and teams as far as possible. Then, when you trust your own estimations about winning probabilities, use our Odds Value Calculator to find the bets offering the best positive Expected Values.
There is no single sportsbook that offers better value odds than others. The key is to develop your skills to the point where you can be more accurate than the sportsbook in estimating winning probabilities. That said, you will probably find it helpful to focus on those betting markets which give the sportsbook the smallest over-round possible.
Unfortunately not. Whilst positive value is important, you also need your bets to succeed at least as often as the winning probabilities assume. For example, if you bet on ten tosses of a coin and you happen to suffer ten losses, the odds that you managed to get won’t help you one bit in the short term. Of course, over the long term it could be a very different story, but only if the results start reflecting your expectations.
No. In fact, if you were to restrict yourself to only betting when you can find provably advantageous odds, you may only bet a few times a month. However, having an understanding of odds and their value will help you to focus on betting only when the odds are no more than marginally negative.
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