What is value betting? how to spot profitable opportunities in sports betting

For anyone serious about becoming a profitable sports bettor, here’s a step-by-step guide on how to use value betting to consistently win at sports betting.

For the serious punter who is asking what is value betting and how to spot it in sports betting, the answer is purely mathematics. The mathematics involved in value betting turn the sports betting between bookmakers and punters on its head. It is a matter of placing wagers when the odds being offered by the bookmaker are greater than the true probability of an event occurring. Profits are generated from value betting by placing wagers with a positive expected value (+EV). It doesn’t matter how many wagers are placed with a positive EV, all that matters is that in the long term they will generate a profit. Value betting is about the price offered by the bookmaker, and not the prediction of the punter as to who will win the sports event. The price, or odds, quoted by the bookmaker for wagers, need to be greater than the true probability of an event occurring for value to be generated.

A Simple Explanation of Value Betting

A value bet is a wager with a positive expected value. This means the wager will win more often than it loses, generating a profit in the long run. Most value offered by bookmakers is not value that has been intentionally placed there by the bookmaker. Rather, it comes from errors in the pricing of wagers, slow response to late-breaking news, and other inefficiencies in the marketplace. So it is not the bookmaker intentionally offering value, but rather the astute punter has identified a value bet offered by a sharp betting exchange.

A simple example of value would be a coin toss where the true probability of the event occurring is 50%. However, a bookmaker may offer odds of 2.20 on the event. This would imply that there is only a 45.4% chance of the event happening. Thus, the bookmaker’s odds of 2.20 guarantee a profit in the long run for the punter. In essence, a winning bet is not a good bet, it is only good because of the price.

How Value Betting Works in Practice

Value betting requires the ability to recognise potential profitable events. Most value bets are identified using three steps to establish their worth:

• Firstly, the true probability of an occurrence is determined.
• Secondly, the odds of a bookmaker are de-vigged to reveal their implied probability.
• Lastly, the two sets of probability are compared to expose potential value bets.

In all cases, the successful occurrence of a value bet will result in a financial profit. Note that value betting in the long term will see the majority of value bets be on underdogs. In the short term, however, this is not always the case, with the odd overpriced favourite winning. In either case, a successful punter must remain calm when required to place large amounts of value bets in order to maximise returns on investment.

See also: What do plus and minus mean in betting? Understanding odds and payouts

Value Betting Explained with a Simple Example

To give you an example of value betting, let us again consider Manchester United v. Southampton. This match is listed in the high volume ‘true’ market (betting exchange) at a high decimal price of 2.50. Some days later, when much less volume has been placed on the match at the sportsbooks, a price of 2.80 is offered by a slower soft bookmaker to back Manchester United to beat Southampton. This creates value because at the high volume of activity in the true market, Manchester United are only estimated to have a chance of 40% to beat Southampton. But at the softer bookmaker’s price of 2.80 (implied chance of 35.7% to occur) there is value because the punter will get an above-expected return for the actual chance of 40% for the event to occur. But remember, if this one bet loses, then the result is a loss of the stake on that bet. However, by placing the same bet 1000 times, there is a very big profit anticipated in the long term from the difference in odds of 4.3% (EV) created in this value situation.

How to Find Value Bets Consistently

Value betting involves using processes to find value in markets rather than relying on chance.

Compare Odds Across Multiple Sportsbooks

The first thing is to search for value when comparing the odds on an event at the sportsbooks that primarily service the recreational punter with the odds on the same event at the sharp reference sportsbook or at the betting exchange. Here the soft bookmaker’s prices will nearly always be greater than those found on the betting exchange for the lay side of an event. The nature of a soft book is to offer better odds than a book that is operating with a healthy margin in order to attract custom from the gamblers that they are primarily seeking.

Use Data and Statistical Models

When you build up a good statistical model that also can be used to make up odds, based on historical data and relevant information for the event, such as player statistics, recent statistics, injury reports and more, you will also be able to use it to identify value in the market. It will remove a lot of emotion from your betting and instead turn it into a scientific numbers exercise.

Look for Market Overreactions

Value in sports is not fixed and tends to change based on the natural fluctuations of a market affected greatly by the typical customer. The two largest factors affecting odds in sports betting are recency bias and the bias towards ‘star’ players. It is rare to find value in odds for soccer matches with many highly paid players, but there are instances when there is plenty of value to be found when one of the star players of a team picks up a minor injury prior to a match. A common instance of this is when a huge amount of money will be placed on the opposing team in the subsequent match with huge odds available to place a contrarian bet on the overpriced underdog.

Key Concepts Every Bettor Should Understand

To become a successful bettor, you need to get familiar with some of the most important terms and conditions related to betting. These terms and conditions will also be discussed in more detail in separate articles.

Implied Probability

Implied probability is determined by the odds of an event. For decimal odds, the implied probability is 1 / odds. There is always a margin in the odds of every event, added by the bookmaker. When you sum up the implied probability of all outcomes of a match, it is more than 100%. Once you remove the vig from the odds of all outcomes for a match, you are left with the true market generated odds, in the absence of a bookmaker’s margin.

Expected Value (EV)

The expected value (EV) for a bet is determined by the true probability of an event occurring (which you can find by de-vigging the odds from a bookmaker) and the odds for that event. This calculates your profit for each individual bet. It then is expressed as a decimal (sub 1). For example, a bet of $100 with odds of 2.50 has an expected value of .40 ($100 x 2.5 – 100 = 40). This means that over the long term you can expect to win 40 cents for every dollar you bet on this event.

Closing Line Value (CLV)

The closing line for an event is generally the most efficient line offered by bookmakers for that event. The difference between the odds you secured on an event and the closing line at a sharp bookmaker is known as your Closing Line Value (CLV). If you can consistently get a CLV higher than 0, then it generally is accepted that you are a good bettor in the long term and will make a profit from your betting.

See also: What does Spread mean in Betting? Understanding point Spreads and how to bet them

Value Betting vs Arbitrage Betting

There is a misconception that sports betting with an edge is just about profiting from an imbalanced market, and that such situations occur frequently enough to be exploited profitably on a regular basis. While it is true that in value betting as well as in arbitrage betting situations are exploited in which a smart bettor can gain from an unbalanced market, value betting and arbitrage betting are two completely different approaches.

Tips for Beginners Looking to Gain an Edge

For those betting bankrolls that are subjected to high short-term variance while seeking to establish value in the various sports markets, a prudent banking system is required in order to prevent a long losing streak from bringing about financial ruin. Thus, rather than employing a money management system that utilises percentage-stakes, the novice bettor is best advised to establish a flat staking plan. For example, by staking only 1% to 2% of his total bankroll for each wager that he places, he can bet to his full potential for thousands of wagers without suffering financial loss for an extended period of time.

In order to further utilise his money in a profitable manner, the savvy bettor should be certain to record all of his bets in a journal of some sort, including the amount that he staked and the amount that he has won or lost as a result of each individual wager. A key factor in achieving the most successful results from sports wagering is the expertise that a bettor has for certain markets, or even niches, within specific sports. For example, a particular individual may be a true aficionado of basketball, but not very knowledgeable regarding baseball. Even so, that same individual will still be able to recognise the best value for sports bets that are placed on baseball, even if he is not as knowledgeable in that regard as a bookmaker would be. Thus, by concentrating on those markets that he understands far better than a sports book, the astute bettor will consistently identify all of the very best value sports bets available in the industry.

FAQs

What is value betting in sports betting?

Value betting in sports betting means that you place a bet where the odds of the bookmaker are higher than the true mathematical probability of the outcome of the event of which you are betting. Thus, in the long run, you will have an edge against the bookmaker.

How do you identify a value bet?

A value bet is identified when the odds offered by a bookmaker are less than the true probability of an event occurring as estimated by you.

Is value betting profitable?

Value betting in the long run is very profitable. It does not guarantee you to win money on single bets, but if you place enough +EV bets, then the law of large numbers will kick in and you will win in the long run.

What is expected value (EV) in betting?

The Expected Value or EV of a wager is the average profit or loss that a bet will yield per unit staked. In other words, if you were to place the exact same bet an infinite number of times, then the Expected Value would indicate on average how much you can expect to win or lose per unit staked. As a result of this, if the EV of a bet is positive, then you have a true mathematical edge against the bookmaker, in that you will make a profit in the long run. Conversely, if the EV of a bet is negative, then you have a disadvantage and will lose in the long run.

Do professional bettors use value betting?

Yes. People can make a living from sports betting. Long-term successful bettors make consistent +EV bets and use a big enough bankroll to withstand downswings and have enough to take advantage of positive CLV.

See also: What does parlay mean in betting? full guide to parlays