Value betting is a must if you want to win as a sports bettor. Only by calculating and identifying value is it possible to be a long term winner. The idea is to take advantage of overpriced odds and mistakes from the bookmaker. If you can do so, you will have a good chance at becoming a successful sports bettor.
What is value betting?
It’s about finding the bet value. If the probability and odds are both high enough to make a bet worthwhile, then it makes sense to pull the trigger. With value betting, we are identifying an edge compared to the bookmaker.
If you can imagine a coinflip – the chance will be 50-50. We already know that. If you get odds 1.80 for tails, there is obviously no value, since you would lose money in the long run: 50 * 1.80 = 90. In the long run, you would get a payback rate of 90 dollars for every 100 dollars you bet.
On the other hand, if you could get odds 2.05 for tails, there would be value. There is still a 50% chance, but the odds make the difference. 50 * 2.05 = 102.5.
We can also turn it around: If there is a crooked coin that lands on tails 60% of the time and not 50%, but you get odds 1.80, then there would also be valuable. 60 * 1.80 = 108.
So to sum up, it’s all about the relationship between probability and odds! You can easily calculate the value by multiplying the two with each other. If the result exceeds 100, you have value, if you don’t get above 100, you don’t have value.
Value betting in sports
Obviously, it’s easy to find the probability with coinflips and other known scenarios. It’s much harder to find the probability with upcoming events, such as a football match, where we don’t know the exact chances for sure. However, we can still try to analyze the matchups and attempt to find value.
Let’s assume we have a matchup between the New Orleans Saints and the Philadelphia Eagles in the NFL. The Eagles are playing at home and are slight favorites. There is a -1.5 spread, but the odds are even:
PHI -1.5 @ 1.95
NO +1.5 @ 1.95
We, however, believe that the Saints have solid chances of winning this game and covering the spread. Let’s assume a 55% chance that they cover the spread, while we estimate a 45% chance that the Eagles will cover. 55 * 1.95 = 107.25. In other words, there is value on the Saints, if our estimations are correct. This could change if the odds change, or if something new happens before the game that makes us reconsider our probabilities.
Of course, we don’t know for sure if 55% is the correct probability, and we can never be entirely sure. But we can make a pretty good estimation if we know a lot about the matchup, and this is exactly how the bookmakers work. They also make their odds based on assumed probabilities. We need to adopt the same strategy and place our bet whenever our estimation is more correct than theirs. This is the best way to make a long term profit in sports betting, and it is exactly what we refer to as value betting.
Analyze – don’t guess or predict
Most bettors don’t make a full analysis when they bet on sports. They usually try to predict events or even guess them. This is the wrong approach. Even large favorites don’t win all the time, and just because we have “a feeling” about something, it doesn’t always equal value.
So we highly recommend that you make a full analysis of every matchup you’re going to bet on. Try to spot value. Maybe there is a crappy team that you only think has a 10% chance of winning (so in 9/10 cases, they will not win), but at odds 15, it gets interesting. You will – on average, theoretically – win money by betting them, like 10 * 15 = 150.
It doesn’t matter what anybody thinks. Try to use math, be precise, and make a realistic analysis with full probabilities. This is the strategy that the bookmakers themselves use, as well as most professional sports bettors. Value betting is how to win long-term!