What is value in sports betting?
When we talk about finding value in sports betting, what we’re really talking about is exploiting a discrepancy in view. Where your view, as the bettor, doesn’t match the sportsbook’s view, as expressed by its odds.
In the search for value, we might, for example, consider an underdog priced, we feel, too far outside. Or a team favoured too heavily in a spread that we believe will be hard, or impossible, to cover.
These are called value bets – where the odds on offer are higher than the true probability of that outcome.
This all brings us back to the notion of implied probability – which we encountered in our discussion of vig – and introduces us to expected value.
Expected value, or EV, is a measure of profitability if you were to place the same bet numerous times. Over time, a bet with a positive EV (+EV) would be profitable; a bet with negative EV (-EV) would not.
Calculating Expected Value
The formula to calculate a bet’s EV is:
(Amount won per bet * probability of winning) – (Amount lost per bet * probability of losing)
Let’s return to the trusted coin toss to illustrate.
The coin toss
Heads or tails – the only two possible outcomes of a coin toss. The implied probability is 50% either side.
The odds for this are written as +/-100 in American odds and in decimals as 2.00. The bet returns even money – i.e., $10 wins $10 – and because the game is fair, you win all of that.
The probability (p) equals 1, so on each side of a coin toss market, p therefore equals 0.5.
If you were to wager this with a friend, as neither of you would have an edge over the other, over time (say 100 tosses) you would expect to break even if you placed a $10 on each toss.
Using the formula for EV then, on a $10 bet:
(10 x 0.5) – (10 x 0.5) = 0
Finding value – Positive EV
If, however, you were offered odds of 115 (2.15 decimal) on heads, the amount won rises to $11.5 while p still equals 0.5. The math would look like this:
(11.5 x 0.5) – (10 x 0.5) = 0.75
This bet has $0.75 of value. Over time you could expect to make $0.75 cents profit from each $10 bet.
An Alternate Formula
The value of a bet can also be calculated by taking its probability multiplied by its decimal odds, minus one. If the value is greater than zero, it is a value bet.
The probability is p=1, so on each side of the coin toss market, p=0.5
- 0.5 x 2 = 1
- 1-1 = 0
The result here is also zero, because it is a fair game.
If we use the example above where the odds on heads shift to 115 (2.15 decimal), the math changes to:
- 0.5 x 2.15 = 1.075
- 1.075 – 1 = 0.075
The math again displays value of $0.75 on a $10 bet.
Effect of vig at -110 – Negative EV
Because we know how vig works, we know the odds wont be as good as +/-100 once vig is added. Sure enough, if we shift the odds from -100 to -110 we know immediately that the EV must be negative.
Odds of -110 equate to winnings of $91 on a $100 bet, while the probability remains p=0.5:
- (91 x 0.5) – (100 x 0.5) =
- (45.5) – (50.00) = -4.5
The EV on this bet is -$4.5.
Using the second formula:
- 0.5 x 1.91 = 0.955
- 0.955 – 1 = -0.045
The vig on this bet is $9, but over time you expect to win and lose an equal number of times, hence the EV is half that, at -$4.5.
Ofcourse, this gets more complicated when the outcome is not binary, but the math is the same.
Luckily, we have tools like our odds calculator that can do much of the work for you.
Finding Value Bets – Top Tips
By definition then, a value bet is one in which the theoretical likelihood of winning is greater than the odds suggest. If your assessment of a particular outcome is greater than the implied probability, then there is value in that market.
We’ve already shown how you can calculate EV to determine whether or not a bet looks good over time, but as important as understanding the math is, there are definitely other factors, some more intangible, that can help.
Know Your S**t; or Specialise
One of the best ways to find value is to know your sport. A hardcore fan is more likely to have a more accurate feel for a game and spot value if their take on an outcome, i.e., their perception of the true odds, differs from that implied by the odds.
To some sports fan, this can seem intuitive.
Finding Value Through Intuition
It may seem counterintuitive to highlight intuition as something to use for a novice sports bettor, but if you’re starting out you’d do well to start with a sport that you’re familiar with.
Your intuition for the game may help, but this is only half the story.
Similar to the old adage that athletes make their own luck through hours and hours of grind and practice, you too can build, or tweak and train, your sense of intuition in finding value.
Set Your Own Odds – Practice Feeling Uncomfortable
A great way to train your mind into thinking about probabilities and value – which will help you get a feel for the markets when you shop the line – is an exercise where you set your own odds on games. Do this without looking at any sportsbooks first.
You are not trying to set odds that you would like to see offered, but odds which you would not feel comfortable taking yourself. This will most likely be cumbersome at first, and may feel awkward or hard to do, but if you stick with it, week in, week out, it’s going to greatly affect your intuitive ability to spot value when it’s on offer.
Always Shop the Line
This is definitely a broken record, but always one worth listening to.
The most obvious way to find any value is to compare sportsbooks and find the best odds for the bet you want to place.
Seems like a no-brainer, but needs repeating.
Take on the Public
Remember that, as much as a sportsbook looks to set sharp markets, the odds and lines still have to reflect the general public’s view on the outcome of the event. Odds and lines also reflect the action taken so far. And the public isn’t always right (it rarely is in fact) – leaving opportunities for you to find value.
Big Name Bias
Big franchise names, enjoy traditional – and sizeable – fan-base followings that can affect betting markets on those teams.
It may be the New England Patriots, the New York Yankees, the LA Lakers or Manchester United, but you may find some of the best value bets taking the other side against these teams as sportsbooks set odds and lines in anticipation of money coming in to back the big names.
As such, underdogs may have odds that are too wide, or point spreads that are bigger than they should be – either making the moneyline payout bigger than it should be, or a spread that can be easily covered.
This can also apply to big name players too if you’re exploring prop bets.
Last Game Bias
Recent form should aways be a consideration when sports betting, but there can be a tendency to over-play the importance of the last result. As any investor knows, past performance is no guarantee of future performance – but in sports at least it is a legitimate barometer.
Just be wary of the fact that high-scoring games, and one-sided results can often serve to gloss over the reality of the game. A scoreline might not reflect fairly on how close a game actually was, suggesting the winner may be stronger than they really are, or the loser weaker.
Knowledge is Power
In sports betting, knowledge is power. The bettor gets his, her, or their, edge over the sportsbook by knowing something the sportsbook doesn’t.
In conclusion
We’ve covered a lot here, but make no bones about it – any successful long-term sports bettor needs to fine-tune the art of finding value in the bets they place.
- Value is found when you believe the odds don’t reflect the fair probability of an outcome.
- It doesn’t matter how many bets you win or lose, it’s whether or not those bets offer value that will make the difference to your bankroll.
- Get comfortable looking and thinking at probabilities, versus win/lose.
- Expected Value is a useful tool in gauging whether or not the odds offer value. But remember, +EV doesn’t guarantee a win, and -EV doesn’t guarantee a loss on any given bet.
- Focus on sports you know well to increase your chances in finding value.
- Shop the line for the best odds available to you.
- Practice makes perfect. Well, maybe not perfect, but it’ll make you a darn site better.
Finding value is key to long-term sports betting success. Good luck my friend…
What is a value bet in football?
Value betting is exploiting inefficiencies in the football betting market for profit. A value bet is one in which the real chance of an outcome is better than that suggested by the odds.
In football, this could be moneyline odds that are too wide on an underdog, or a point spread set too wide that the underdog should more easily cover. Generally speaking (but not always), in football, value tends to be found when backing the underdog versus the favorite.
How does value work in betting?
Value works in betting when the odds-implied probability of an outcome differs from your personal take on the probability of an outcome – although on any given day any team or individual can under- or overperform to disappoint you, regardless of your homework, research of gut instinct.
What does +3 mean in sports betting?
You can read all you need to know about a point spread here, but remember that the favorite to win will be handicapped by the number of points at which the spread is set – in this case, 3 points.
The favorite will appear, therefore, as -3. The underdog is granted a 3-point head-start, and thus appears as +3.
This means, to “cover the spread” the favorite must win by 3 points or more. If they win by just 2 points, the +3 underdog wins the bet.
