In the world of betting, value is king.
Anyone can place a bet on the favourite – be it a horse, a dog or a football team – but the most effective betting comes from weighing up the true value of the bookmaker’s odds.
This is done by comparing the real probability of a bet succeeding against the implied probability that is being offered in terms of the odds. If your probability assessment makes it more likely than the odds’ implied probability, then you have yourself a value bet.
What Is Value Betting?
Value betting is all about implied probability, which is provided by a bookmaker’s odds.
Odds can be converted into a percentage to help give you a clearer understanding of the implied probability, but fractional odds will also give you an idea.
Remember, you are assessing the implied probability of the bookmaker’s odds against your own assessment.
So, say Liverpool are playing a football match against Tottenham and the odds of a Liverpool win are 1/1 (Evens).
That means the implied probability of a Liverpool win, according to the bookmaker’s odds, is 50%.
However, if you think the chances of a Liverpool win are 60%, or 4/6, then you have a value bet.
How to Calculate Implied Probability
Every price a bookmaker puts up about any event is a rough estimate of probability, taking into account the ‘vig’ – the sportsbook equivalent of the ‘house edge’.
So using our example above, Liverpool being priced at Evens means that the bookie considers them to have about a 50% chance of winning. If they were priced at 4/6, they would be seen as having a 60% chance.
Tottenham would have a 33.3% chance of winning if they were 2/1 or a 25% chance if they were 3/1.
To get a probability percentage from fractional odds, like 5/1, simply divide 1 by the sum of the two numbers (5 and 1), and then times that figure by 100. So, 5/1 converted into a percentage would be 1 ÷ 6 (5 + 1) x 100, which equals 16.66%
When using decimal odds, (6.0 in this case), divide 1 by the decimal number and then times by 100.
How to Spot a Value Bet
The best way to spot a value bet is to do your homework, because the more you know about the sporting event you are betting on, the more chance there is that you will be able to identify value opportunities.
That means keeping a firm eye on statistics and team news, and any other signs that the bookie may not have considered. It is also important to shop around and find the best value odds for the bet you are looking to place. Odds will differ from bookie to bookie.
Betting exchanges – where the prices are determined by peer-to-peer betting – can also give an indication of where the money is going.
Another good tip is to look into niche markets, as less popular betting markets are usually priced more favourably. This is partly due to the fact that they haven’t been analysed as thoroughly, but it is also because other bettors aren’t influencing the market quite as much. For this reason it is generally a good idea to get your best in as early as possible, before other bettors have got involved and the bookie has decided to lower the odds.
Why Value Betting Matters
If you are to get the most out of your betting then a grasp of the concept of value is essential.
Ideally, you should only place a bet when you think it has good value, and this is a great way of encouraging discipline and bankroll management.
Every potential bet should start with the same question: “Do I think the chances of this happening are greater than these odds?”
If you ask yourself this question every time you bet, and are informed about the real probability of the outcome, then you should always be getting good value for your money. Remember, however, that probabilities are always subjective, and that even good value bets should be thoroughly thought through before being placed.