Finding value in the odds is the best way to make money from sports betting. In fact, it’s realistically the ONLY way to make money on a consistent and regular basis. If you don’t bet for value, your chances of long term success are close to zero. It’s as simple as that.
Most sports bettors don’t realize this. Instead of betting for value, they tend to bet on whatever outcome they think is most likely to happen. While this does seem like a logical approach, it’s fundamentally flawed. Although you’ll probably win a lot of wagers by betting on the most likely outcome all the time, you won’t necessarily make an overall profit.
What many people don’t realize is that successful betting isn’t about picking as many winners as you can. Instead, it’s about finding spots where the odds are in your favor, so that you can get your money down when you have a positive expectation. To do this effectively, you MUST understand the concept of value.
We cover exactly what value is in the section below. We also teach you how to identify value in the sports betting markets, and offer some useful tips for finding better value. By thoroughly reading what we have to offer here and by actually applying what you learn, you’ll INSTANTLY improve your chances of making money from sports betting.
In the context of sports betting, value can be either positive or negative. Positive value exists when the probability of a wager winning is greater than the probability reflected in the odds. To put it another way, a wager has positive value when it’s MORE likely to win than the odds suggest. A wager has negative value when it’s LESS likely to win than the odds suggest. In order to make money, you’ll need to find positive value.
The probability reflected by the odds is known as the implied probability. We’ll explain more about that shortly, but first we’re going to illustrate the concept of value with a very simple example. We’ll come away from sports betting for a moment, and look at the toss of a coin.
Now, we all know that the toss of a coin has two possible outcomes. It can be either heads or tails. Each outcome is equally likely; there’s a 50% chance of heads and a 50% chance of tails. Imagine that someone offered you the opportunity to bet on the outcome of a coin toss, at the following odds.
At these odds, a $10 wager on heads would return $30 if successful. A $10 wager on tails would return $15 if successful.
We’re pretty sure you’d bet on heads. It’s the obvious choice. You’ve got a 50% chance of winning either way, but the potential payout is significantly higher for heads. Who wouldn’t want to win $30 instead of just $15?
A wager on heads here offers positive value. How do we know this? Because the chances of it winning are greater than the implied probability of the odds.
At this point we should explain how to calculate implied probability. This is actually very simple, especially when working with odds in the decimal format. All you need to do is apply the following formula.
This will always give you a number between 0 and 1, which is technically the “correct” way to express probability. However, it’s much easier to work with probability as a percentage. That’s why we usually apply the following formula instead.
This formula will give you the implied probability of odds as a percentage. As you can see, it’s pretty simple. If you’re working with odds in a format other than decimal, you might like to use our odds converter tool. This will do the necessary calculations for you automatically.
Let’s apply this formula to the odds for heads in the above example.
This tells us that the implied probability of the odds for heads is 33.33%, and we already established that the actual probability of a wager on heads winning is 50%. Since 50% is greater than 33.33%, we know that a wager on heads at 3.00 offers positive value.
Let’s apply the same formula to the odds for tails.
The actual probability of a wager on tails winning is also 50%, which is LESS than the implied probability of the associated odds. Therefore, a wager on tails at 1.5 offers negative value.
Now that you know how to determine whether a wager has positive value or negative value, there’s another key point we need to make.
This is precisely why it’s so important to understand the concept of value. You need to be able to identify wagers that have positive value, because it’s those wagers that will ultimately make you money. They’re not guaranteed to win every single time, of course, but the odds are essentially in your favor. Consistently betting when the odds are in your favor SHOULD result in an overall profit.
Let’s continue with the coin toss example to demonstrate. If you placed a wager on heads 100 times, you’d expect to win roughly 50 of those wagers. At odds of 3.00, your 50 wins would return a total of $1,500 (50 x $30). Your 50 losses would cost you $500, for a total profit of $1,000.
Please note that there are no guarantees you’d win exactly 50 times out of every 100. That’s the theoretical expectation though, based on the relevant probability. As we can’t predict the future, working on the basis of probability is our best option.
We hope you’ve found this all to be pretty simple so far. We deliberately wanted the coin toss example to be straightforward to make it easy for you to understand the basic concept of value. Unfortunately, things get a little more complicated when we apply the concept directly to sports betting.
Identifying value in a sports betting market is basically a two-step process. First we assess the probabilities of the possible outcomes. Then we compare those probabilities to the implied probabilities of the relevant odds.
The second step here is easy, but the first one is not. Sports events are very unpredictable, and it’s impossible to assign precise probabilities to the various possible outcomes. There are simply too many variables. All we can do is try to make the most accurate assessments we can and trust our judgement. There’s no right or wrong approach here really, as it’s more art than science. It ultimately comes to down to how we interpret all the information that’s available to us.
Don’t rely solely on your existing sports knowledge when assessing the probabilities of potential outcomes. Learn how to carry out effective research and analysis if you want any chance of making accurate assessments on a regular basis.
Here’s an example to demonstrate how we go about trying to identify value in practice.
There’s an upcoming basketball game between the Chicago Bulls and the New Orleans Pelicans. We want to bet on the winner of the game, so we need to study both teams and try to assess their chances of winning. We check the standings on ESPN and see that Chicago is ranked 9th on East with a 19-21 record. New Orleans is ranked 10th on West with a 16-24 record. The two teams seem to be almost evenly matched, with Chicago having just a small advantage.
After doing some more extensive research, we give Chicago a 55% chance of winning and New Orleans a 45% chance of winning. We then look at one of our preferred basketball betting sites, and see the following odds on offer.
By using the formula we showed you earlier, we calculate that the implied probability for Chicago winning is 57.80%. We gave them a 55% chance of winning, so there’s no positive value in backing Chicago. Remember, we’re looking for spots where the actual probability is HIGHER than the implied probability.
The implied probability for New Orleans winning is 47.62%. Again, there’s no positive value here. We gave New Orleans a 45% of winning, which is lower than the implied probability.
Neither team is offering positive value here, which is something you can expect to see happen a lot. Value is hard to find in the sports betting markets, because the bookmakers are very good at what they do. They’re in business to make money, so they obviously want to give away as little positive value as possible. You can read more about how they do this in our article explaining what a bookmaker does.
This is a fundamental point that you MUST remember. If you can’t find positive value in a betting market, then avoid betting. The whole purpose of trying to identify value is to ensure that you only put your money down when the odds are in your favor. If you choose to bet even when there’s no positive value on offer, then everything you just did was a complete waste of time.
Here’s another example of trying to identify value, to highlight another important point we want to make.
This time we’re betting on tennis. There’s an upcoming match between Milos Raonic and Stan Wawrinka, and we have reason to believe that Raonic has an edge. These two players are almost evenly matched in terms of skills, but Raonic has been in good form for his past few matches while Wawrinka has not been at his best. We give Raonic a 60% chance of winning, and Wawrinka a 40% chance of winning.
After checking the odds, this is what we’ve found.
The bookmakers seem to agree with our view that Raonic has the edge. He’s been made the favorite, and his odds have an implied probability of 68.97%. That’s higher than the 60% chance of winning that we gave him, so there’s no positive value.
At odds of 2.70, the implied probability of Wawrinka winning is 37.04%. We gave him a 40% of winning, so there IS positive value here. Even though we actually think he’s more likely to lose than win, the right thing to do here is back him.
This seems counter-intuitive, but it highlights the point we’re trying to make with this example. Betting for value often means betting AGAINST what we think is most likely to happen. We understand how difficult this can be for some people. That’s why it’s important to remember that value betting is all about getting money down when the odds are in our favor. Sometimes that will mean backing the favorite and other times it will mean betting the underdog.
In the final section of this article we offer some advice for finding better value in the sports betting markets.
We can’t provide you with a perfect blueprint for identifying value in the sports betting markets. We can, however, offer you some useful advice. The following tips are all pretty straightforward, but they’ll make finding positive value on a regular basis much easier.
The first tip here should be obvious, but it’s still worth mentioning. You’ve got a MUCH better chance of finding value when betting on sports that you follow closely and genuinely understand. It’s a lot easier to make accurate assessments of probability when you’re familiar with the relevant teams and players, and know what factors are likely to affect the outcome of events.
When you do know which factors affect the outcome of events, make sure that you take them ALL into account. Otherwise you’re not going to make very accurate assessments. While certain factors will carry more weight than others, the only way to make truly informed judgements is to consider anything and everything that might have an impact.
It’s important to make these judgements BEFORE you look at the relevant odds. This might not seem important, but we assure you that it is. If you look at the odds first, they’re bound to influence your thinking in some way. Whether consciously or subconsciously, your own assessments of the probabilities will be guided by what the odds suggest. This makes it more difficult to be properly objective.
We’ve included our fourth tip because there’s a common belief that heavy favorites cannot offer positive value because they’re usually at very low odds. This is nonsense. If a favorite is extremely likely to win, then even very low odds can represent positive value. Remember, it’s not the actual odds that matter per se. It’s how they compare to the relevant probability that’s important.
Our final tip is one of the easiest ways to get better value. The odds available at different bookmakers and betting sites usually vary a little, so it pays to shop around and find the best odds for each wager you place. Although the differences are typically very small, these small differences add up over time and can end up being quite significant. Significant enough to justify spending a couple of extra minutes on each wager, that’s for sure.
At a basic level, the concept of value in sports betting is extremely simple. Don’t underestimate it’s importance though. Although consistently finding positive value in the betting markets is a real challenge, it CAN be done. If you put in the necessary time and effort to improve your ability to make accurate assessments of probabilities, you WILL see better results. Betting for value doesn’t guarantee success, but it definitely makes it more likely.