Key to successful betting is in finding value betting situations. A value betting situation is one where the odds on offer from a bookmaker reflect a probability that is less to the actual probability of that outcome occurring.
So let’s consider an example of a coin toss.
With a toss of a coin, there are two possible outcomes. The coin either lands on heads or it lands on tails. (Yes, ok, it could land on its side. But the likelihood of that is infinitesimally small. So let’s ignore it shall we?).
The probability (or chance) of the coin landing on either heads of tails is even:
Using this probability to calculate the odds, would give us a decimal price of 2.00 for heads and 2.00 for tails. e.g 100/50 = 2.00.
So let’s say we have two bookmakers.
- Bookmaker A is offering odds of 1.90 on heads while
- Bookmaker B is offering odds of 2.10.
Let’s say we want to bet on the coin landing heads, which one of these bookmakers is offering value?
We can calculate the value this way:
|(Probability multiplied by the decimal odds) minus 100%
So let’s look at Bookmaker A.
We calculate the value:
|(50% multiplied by 1.90) – 100%
At -5%, Bookmaker A is offering us less than true value betting. This is not a bet we would want to take. It is not a value situation.
So let’s look at Bookmaker B.
Let’s calculate the value:
|(50% multiplied by 2.10) – 100%
Bookmaker B is offering us 5% value to bet on heads in a coin toss. We will take this situation every day thank you very much. It is indeed a tremendous value opportunity.