The term value is frequently used to talk about sports betting. Finding value is very important to place a successful bet, but there are many punters who do not fully understand the actual concept of the term.
If you want to be a successful punter or you wish to make a living out of a hobby, you need to know what value means, how to calculate it and to determine, whether or not a bet offers value. Keep in mind, that assessing value is very subjective and there is no correct way to do so. You need to trust your own judgement and prepare yourself to stick to it.
Value in Sports Betting
Value is a term that is used when you invest. The meaning of the term does not differ when we talk about value in sports betting. Value betting is backing something on the basis that its chances of winning are higher than the odds indicate. In other words, the bet’s price is less than its worth, so there is value in the bet.
The odds that the online bookmakers provide are based on calculations of expectations of events. The worth of a bet is the actual probability of an event to happen or not. If the price is greater than it’s indicated by the probability given by the bookie, you have found a valuable bet. Value betting is key to long term profit.
Here is an example with a coin toss to make things clearer. When you toss a coin, there are two possibilities – heads or tails, meaning that there is a 50% chance for each outcome to happen. So you have the opportunity to bet on tails at decimal odds of 3.00 (+200 in American odds and 2/1 in fractional odds), which means that if you place a $1 bet and tails come in, you would generate a $2 win. But if heads came in, you would obviously lose the $1 you’ve placed as a bet. This bet has value, because the odds are higher than the probability of winning.
Now let’s say, that you have placed a $1 bet on tails at decimal odds of 1.5 (-200 in US odds and ½ in UK odds), i.e. you would win $0.5, if tails came in, and lose $1, if heads came in. This bet has no value, because the odds are smaller than the chances of winning.
Remember that good value is not a guarantee that you will make money. For example, if you make a bet on tails at 3.00 for 10 coin tosses, heads could come in ten times in a row and you would still lose money. You would have made nice bets, you simply were out of luck.
How to Calculate Value
It is not difficult to calculate the value in the coin example above since you know there is 50% chance of either winning or losing. However, in sports betting, calculating the value is more complicated, because you need to guess the probability of an outcome, which is based on your own assessment. Successful bettors have managed not only to understand fully the term value, but also to estimate the probability.
There is no exact way to calculate the chances for an outcome, because it is down to you and your judgement. One cannot say it is easy to look for value, but it is a must, if you want to be a successful punter. Once the probability of an outcome is estimated, you can see the odds and then you will be able to calculate the value.
Calculating the value when using decimal odds, is very simple and you can easily understand it. The first thing you need to do is estimate what are the chances of winning in percentage, based on your own judgement, and after that you need to find the EU odds (decimal) for the wager. Then, you have to multiply the percentage probability of the bet winning by the decimal odds. If the result is at least 1.00, you have found yourself a value bet.
Let’s look at this example. You’ve decided to place a straight bet on Arsenal to win a match. If you think the team has a 70% chance of winning, you check up the odds, which are 2.50. So you need to multiply 2.50 by 70% and the result is 1.75. The number is greater than 1.00, therefore there is value in the bet. Do not forget that value is based on your own judgement.
It is easy to calculate value. The difficult part is making an accurate assessment of the chance of winning. Estimating the probability is not something that you can learn from books, but a skill you develop through time. Some punters examine past events and results, others make decisions based on statistics, but some rely only on their intuition. The better you get, the more money you will win.
The concept of value is often misunderstood by punters. There are some common misconceptions about that term that you need to be aware of in order to avoid confusion and make the same mistakes like some bettors do. It is of great importance to fully understand value, if you want to win a lot of money by placing bets.
The most common misconception is that placing value bets means that you will always earn money. This would be true, if you had an outstanding system to calculate the chance of winning. However, this simply is not possible.
It is essential to remember finding a value bet does not mean you have found a recipe for successful betting. Even if you calculate everything correctly, there is always a possibility the outcome would go against you.
Another common misunderstanding is that value does not matter and betting is all about determining who the winner is. This simply is not true. Of course, it is about determining who will win, but value still does matter.
It is said that finding good value at very short odds is not possible. It is way harder to find value on short odds, but certainly not impossible. In addition, placing bets at greater odds does not mean it represents good value. Many punters think it is better to get one big prize than several smaller ones, but in the long term, that is not true.
Finding good value is not a guarantee you will be a successful bettor, but it definitely should not be ignored.
Let’s proceed with the easiest ways to optimise your value betting. It would be better if you compare odds at different online bookmakers, which will increase the possibility to get the best return on your winnings. Many punters tend to forget the difference between the odds available in the sites is very small, but essential. If you spend some time on researching the best odds, it can make a difference in the long term.
Another way to maximize your winnings in the long term is using a good staking plan, for example the Kelly staking plan. If you are sure that the chances you calculate are higher than the bookmaker’s, this plan may produce good results.
The formula which the Kelly Staking plan uses is S = (K / P – 1) / (K – 1). S stands for the optimum stake from your bankroll, the odds provided by the bookmaker are marked with K and P stands for your judgement of the odds. For example, S = (3.50/2.00 – 1) / (3.50 – 1), where S is equal to 0.3 or 30%. This is a high percentage and it is not advisable to bet such amount of your bankroll. But there is a way to decrease the risk of betting too much of your bankroll. This is achieved by using the so-called Kelly divider.
This divider uses one number from 4 to 10. The number will reduce big fluctuations in the sum of money you have won and lost. For example, if the number 7 is used as a divider, the formula will look like this S = (3.50/2.00 – 1) / (3.50 – 1) / 7, S = 0.043, which means that you should bet 4.3% of your bankroll and no more. The higher the divider is, the smaller the stake.
If you spend some time to fully understand value betting, you will not regret it. Expert punters know every little detail of how to place the perfect bet. If you want to be a successful bettor, you should do so, too. The big money is waiting for those, who know what they are doing. Combining knowledge with luck is better than relying on luck only.