One of the hardest things to explain to people with only a casual (and often stubborn) understanding of betting, is the concept of betting value. Many punters struggle to understand that a team that is at long odds to win a football match, is worth betting on. Let's say West Brom are playing at Manchester City. While West Brom may be a genuine underdog, the odds on offer for a West Brom victory may still represent great value.
9 Points of Value Betting1. What Is Value Betting?
What Is Value Betting?
Being a successful bettor is in understanding the difference between a team's chances of winning and the chances of that team winning in comparison to the betting odds on offer. Success in betting is continually finding value bets and patiently betting on these value bets coupled with a staking plan that makes the most of the value identified, regardless of how improbable the particular outcome may seem.
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Sometimes it takes seeing it with your own eyes. Think of all those times when there was a major upset. You'll often think to yourself, who would have bet on that team to win that? Well, shrewd experienced bettors, that's who.
Understanding value and finding value bets is the key to long term betting success. To an experienced bettor, it might seem like common sense but for someone new to betting, making the shift from sports fan to serious bettor with an understanding of betting value can be a difficult task.
It's not easy feeling comfortable betting hard earned money on a team that absolutely nobody thinks has a realistic chance to win. But becoming a successful sports bettor requires just this. Finding value bets and consistently backing them, no matter how uncomfortable it may make you feel, is what makes a successful sports bettor.
How To Calculate Value Bets
Before we discuss the methods for developing a sense for betting value, let's first briefly discuss the concept of betting value itself. In particular, how to calculate value bets..
What is a value bet? A value bet is simply a bet where the likelihood of a given outcome is greater than what the odds on offer reflect. Let's consider a coin toss. When tossing a coin, there is a 50% chance that it will land on heads. Let's say that a bookmaker is offering odds of 2.10 for the coin to land on heads. This is a value bet. Why? This is how we calculate a value bet:
- Value = (Probability * Decimal Odds) – 1
- Value = 1.05 – 1
- If the value is greater than 0, then we have found a value bet
- So in our example, do we have a value bet?
- Value = 0.05
So betting on the coin to land on heads at odds of 2.10 is a value bet. Betting on sports however is a little trickier. Unlike a coin toss, we do not know the precise probability for a given outcome. We may give our best estimate on who may win an upcoming Premier League match between West Brom and Manchester City, but it can only ever be out best estimate. And this is the task of successful sports betting. A successful sports bettor finds value bets by estimating the likelihood of given outcomes better than a bookmaker does.
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How To Identify Value Bets
Developing a sense for betting value you can have confidence in is no easy thing to achieve. Like all good things, it takes time and effort. Here's how to improve your chances of finding value bets.
When you first start betting on sports, it's a good idea to specialise. In particular, it's a good idea to specialise in leagues and tournaments you are already familiar with. After you have developed your sense for betting value by focusing on leagues you know well, you will then be able to apply what you have learned to other leagues and tournaments. Bet on what you know best first before you begin to expand your field of expertise.
You don't need to be a maths wiz to find value bets. But what you do need is to understand probability. Why? Simply because betting odds represent the probability of a particular outcome occurring. This is known as their 'implied probability' and is calculated as:
- Implied Probability = 1 / decimal odds
- So if we use our coin toss example, the implied probability for the odds of 2.10, is:
- Implied Probability = 1 / 2.101
- Implied Probability = 47.62%
So the odds being offered suggest the chance of the coin landing heads is 47.62%. But we estimate (well, in this example, we know) that the probability for a coin landing heads is 50%. This is what makes this a value bet, because the chances of the coin landing on heads is greater than the probability reflected in the odds on offer.
Set Your Own Odds
This is a great exercise and will help you develop your ability to find value bets. You sit down and look at the upcoming fixtures in the leagues or tournaments you bet on and come up with what you think the odds should be for each match. You do this without looking at any bookmaker odds. It's just your opinion, nobody else’s.
What you want to come up with is what we refer to as 'the uncomfortable compromise'. You're not setting the odds you would like to see the bookmakers offer, you are setting odds that you would not feel comfortable betting on yourself. So if for example you are betting on the Asian Handicap market for the match between West Brom and Manchester City, you want to come up with a handicap that if the bookmakers themselves set as the handicap for the match, you would not feel comfortable betting on either side of that handicap, whether it be Manchester City -1 goal or West Brom +1 goal, or whatever you feel a fair handicap for that match should be. In this task, you are essentially playing the role of the bookmaker.
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We can't emphasise how helpful this task can be to a punter who just starting out in sports betting. Setting your own odds gets you thinking in terms of probabilities and by checking the results of your own odds, it allows you to pit your betting wits against the experienced bookmakers. It takes time to do. Yes. It also takes effort. Think of it like going to the betting gym. There are days you may not want to do it, but in the long run, your betting fitness will only improve. Doing this religiously each week of the season for the sport or league you plan to specialise in can quickly sharpen your sense for finding betting value.
It's A Betting Market
Always remember that it's a betting market. The pull and give of general betting opinion is going to set the odds. Making this a habitual way of thinking is not only hard to do, but can at times reduce the sport your love so much, to a matter of mere economics. Once your head gets wired in this way, it's very hard to undo. It may change the way you perceive sport and you may find it difficult to ever think of sport that same way again. But for understanding and identifying betting value, that can be a good thing.
Review Your Results
You don't know where you're going if you don't know where you've been. Much of the work in developing an eye for betting value is in reviewing how your previous assessments have performed. Where did you get it right? Where did you get it wrong? When you start out setting your own odds, you're prone to exhibit pre-conceived biases. Some may be accurate. Many will not. You can remedy this by reviewing your assessments regularly.
Like developing any kind of skill or talent, developing your ability to find value bets takes time. The development of an intuitive sense for betting value and 'gut feel' for the betting markets will often provide the basis for any success going forward, even if you plan a more abstract approach such as the development of a betting model. Knowledge is power and the greatest knowledge comes through experience. And experience worth anything is experience well earned.