How do you calculate a value bet and it’s true probability?

The easiest way to explain how to find value bets is with the example of a coin toss. When tossing a coin there can only be two outcomes; heads or tails. We know that the probability of the coin toss to land on either heads or tails are 50% each. In decimal odds, this equals to an odds of 2.00 for either outcome.

This is called the “fair odds” and represents the true probability of an outcome to occur if the bookmaker wouldn’t add their profit margin, or “vig”. To calculate the likelihood of this happening in decimal odds we use this formula: Odds = 1/probability in decimals. In this example, the odds would be: 1/0.5= 2.00 which is the accurate odds of this specific outcome to happen.

A value bet

Now take the above coin toss example and imagine you were offered odds of 2.10 on heads at one bookmaker. Would you take that bet? Does it have an edge? Since you get better odds than the actual probability of the outcome to happen you should, of course, take the bet.

The odds of 2.10 is higher than what the underlying probability suggests, creating an edge – a value bet. The bigger the difference, the more profitable the value bet will be and the more advantage and profits you can expect against the bookies.

When you place a value bet in sports betting, the expected value is shown as a percentage number. How is this expected value calculated and how do you find value betting situations? Well, bookies don’t have a perfectly balanced betting market. Very often, betting odds that a bookmaker offer

The true odds

You might ask yourself how we know what the real probability, or the true odds, should be? Our value bets finder compare millions of odds, market moves and other bookmaker data against so called sharp bookmakers. A sharp bookmaker has deep knowledge about the sports betting market and has the “real odds” which lies very close to actual true probability (likelihood) of an outcome to occur.

These accurate odds, together with betting bias (which is weighted into the bookmaker profit margin) and market efficiency are used in the value betting software to finding odds with value in sports events. This together with the built in Kelly Criterion staking strategy, that for each value bet calculate the optimal bet size for maximum growth of your bankroll, makes the value betting software a winning way to turn gambling on sports betting into an investment.