A value bet is a bet where the probability of a given outcome is greater than the bookmakers odds reflect. Simply put, when value betting you will be placing bets that have a larger chance of winning than implied by the bookmakers odds. This means you will have an edge over the bookmaker in the long run.
What do I need to start?
An internet connection and a computer or mobile.
Some capital to invest (you can start with as little as a few hundred Euros).
Sign up with a few recommended bookmakers for value betting (you can start with just one, but more bookmakers mean more value bets).
Value betting with the example of a coin toss
When tossing a coin there can only be two outcomes; heads or tails. We know that the chances of the coin to land on either heads or tails are 50% each. This equals to an odds of 2.00 for either outcome.
To calculate odds we use this formula: Odds = 1/probability in decimals. In this case, this is 1/0.5= 2.00
Now imagine you were offered odds of 2.10 on Heads and odds of 2.00 on Tails from two different bookmakers. What would you bet on?
Since the actual probability of the two outcomes is the same you should, of course, bet on the higher odds.
The odds of 2.10 is higher than what the underlying probability suggests, creating a value bet. The bigger the difference, the more profitable the value bet will be.
How to detect value bets
Finding value when sports betting is not as easy as detecting value in a coin toss. In sports, we cannot know the exact probability for a given match.
However, some bookmakers have proven that they are extremely good at determining odds that reflects the actual probability of an outcome. These are often referred to as “sharp” bookmakers, or “sharps”. Some sharps are better than others on certain sports as well. By evaluating these sharp bookmaker’s odds, taking betting bias and market efficiency into account, our servers can determine the “true odds” for any given match. This means that we also know when other bookmakers odds are off and where a positive expected value occurs.
Value betting situations in sports can occur when new information enters the market. For instance, if the line-up changes or if a key player gets injured. The sharp bookmakers automatically adjust the odds for that game according to this new information.
Other bookmakers will follow, but it could take minutes or even hours before they adjust their odds according to the market changes. These bookmakers will still show odds that doesn’t reflect the actual probability of the outcome.
Some bookmakers also set higher odds because of market reasons, or well-known betting biases like customers overvaluing long shots and winning streaks.
As a result of this, there will always be inconsistencies in the odds offered by the bookmakers. This means there will always be plenty of value betting situations for you to profit from.
In our earlier example with the coin toss, the expected value is 5%. It’s calculated as:
(Odds / true odds) -1
(2.10 / 2.0) – 1 = 0.05
Note that this is a trivial example, and our service also takes into account:
- The margin of the bookmaker, also known as the “juice”.
- Betting bias. Most bookmakers don’t balance their odds perfectly, they adjust their odds to players betting bias and the market.
- Market efficiency. A newly open market can offer a lot of value, but the true odds are also more unreliable.
- A proven staking strategy, the Kelly criterion.
- Several sources for the probabilities (true odds), that are proven over time to be profitable.
Expected Value (EV) and Variance
It’s important to see value betting as a long term way to profit where the number of bets plays an important role. It’s all about volume. You need to place as many bets as your time and bankroll allow. The number of bets required to reach statistical significance is much higher than what most people think intuitively. You will have to place a couple of thousand bets before you will know with a great deal of certainty.
Variance will have a large impact on your results if you have a small sample size of bets. But with a large number of value bets, your results will always move towards it’s expected value over time. Learn all about expected value and variance.
You have to be prepared for downswings since you only bet on a single odds. Meaning you can lose since you do not cover all the possible outcomes (like you do when arbitrage betting). But you will profit in the long run.
Value betting differs in a number of ways compared to sports arbitrage betting. Check out the differences between value betting and arbitrage betting.
Want to learn more about value betting?
Get a head start by reading our best tips for value betting beginners. Remember, when value betting you have the upper hand on the bookmaker. But you have to build confidence in the value betting process and put trust in making money long term.
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