Wondering what value betting is all about?
Then you are in the right place as that is what this piece is all about.
What is value betting?
Value betting is the capacity to identify a way to beat the bookmaker or have a slight edge on the bookies or another bettor on an exchange. When bets are priced lower than what it is worth, then we can categorically say it offers value.
What can we say a value bet translates to?
Value is a generally used word in capital investments and this meaning is similar in sports betting – if a selection’s probability of occurring is less than it should be, then there is an opportunity for a value bet.
Profitable punters and gamblers know that there is a thin line and difference between market chances of happening and how the odd available can be compared. For you to be a successful punter, you have to be able to identify and stake on these value bets, no matter how the probability of the outcome would happen.
Staking on a bet that offers profitable value is not as easy as searching for odds on favorites’ market. Affirmatively, odds on favorites’ games are more likely to be successful than thought, but that doesn’t imply such odds offer value for its bets. Instead, the way to long-term profitable betting is to understand the likelihood of an outcome of an event precisely and identifying where such market can be harmful and result in loss.
The Connection between probability and odd
Probability can be defined as the possibility of a scenario coming to pass in percentage. Betting comprises assessing the probabilities of the outcome of an event happening – from impossibilities to possibilities. Betting companies and exchange traders actually weight probability and convert it into odds.
Betting value represents itself when the odds present are a pseudo-reflection of the actual probability of the event happening.
Let’s exemplify this scenario with the use of a coin toss to explain vividly what betting value is and how to calculate the expected value of a bet.
Let’s assume the coin and the toss is fair. Each outcome (heads or tails) therefore has an equal probability (50%) of occurring – therefore the odds should be 2.0.
The result of this toss will be 0 for either a Head or Tail – so if you tossed a coin infinitely it would theoretically end up all squares.
Let’s say that Paul offers you odds of 3.25 on Heads. We explain in detail how to calculate expected value, but for the purpose of this article the formula is:
(Amount won per bet x probability of winning) – (Amount lost per bet x probability of losing)
If you placed £5 on the coin landing on heads at 2.15, the expected value of the bet is calculated in the following way: (11.50 X 0.5) – (5 X 0.5) = 3.25
This shows an expected value of 3.25 and is great betting value. Therefore you would expect to make an average profit of 3.25p for each £5 bet because the odds received are better than the implied odds of the coin toss.
Odds with a bookmaker
When you make it a habit to find value bet, you will make huge money in the long run. But note that bookies never intentional offer you an opportunity to place value bet, because the odds they offer do not actually have the probabilities of the real outcome of events.
When a genuine bookmaker offers you odds on a coin toss, it would very likely be 1.80 on both Heads and Tails – with a margin less than 5%.
When you calculate the expected value with the same stake but different odds would result in -0.5 – meaning over time you would lose an average 80p for every £10 bet and is, therefore, a bad value bet.
So if bookies odds are unfair and seem insurmountable, how can you as bettors ever make a profit?
Bookmakers are gurus of setting accurate odds to create a profit margin on their betting markets. But, sports are different from your regular casinos or coin tosses. The variables in sports are such that can impact the result, and this is where you as a genuine punter can gain an advantage over the bookie and value bets.
How can I identify value bets?
Looking out for a good value betting is not an easy task, but we will show you how you can do that and make ample profits.
1. Set your own odds according to well-researched forecast
Just like when stockbrokers analyse financial reports, value punters should calculate their own odds for a market using a well- researched strategy known to achieve the desired result. By doing the calculating yourself, you can compare them to the bookies own on the betting exchange and see if a particular selection is undervalued or overvalued.
Unlike bookies, a betting exchange allows you to set your own back or lay odds irrespective of what has been offered already, which is apt for value betting.
2. Reason along probabilities line, not favourites and underdogs (think like a bookie)
The purpose of value betting as we now know is to see the probability of an event more accurately than bookies or other bettors on an exchange. To achieve this is paramount you think in probability and not just backing favourites to win, you will make a profit by assessing each team’s chances of winning rather than just on who is stronger on the pitch.
Favourites do not always win, so why not, as a smart punter, key into it? Once you have calculated your own odds, you should aspire to pick differences in the implied probabilities for each event, compared to what a particular bookmaker has to offer. Don’t be concerned about betting on the underdog or an outcome you don’t think will be successful if there is betting value in the odds.
3. Assessing and evaluating
Basing your statistics on mathematics and probabilities is better and more feasible than basing it on emotions and guts feeling. Therefore, once you have analyzed your expected value you must assess and evaluate all other pertinent information available that can make you win, such as situational factors which your model hasn’t incorporated before making a decision that might affect your chances of making a profit.
4. Be a specialist
The best way to find value bet is to specialize in particular niche markets, where the playing field is fair between bookies and bettors on an exchange. When you understand a particular market very well, you will then be able to identify odds that you think can be of good value from your own view, providing you with an opportunity to make value bets.
How you can apply this to betting?
Now that you understand the interpretation of odds and possibilities, finding value should be easy for you and prominent in your betting if your desire is to make a profit in the long-run.
Understanding these probabilities and calculating them precisely is the key to a successful betting career. Computing the true chances of an outcome more accurately than others will provide you with potentially profitable opportunities through value betting.
Betting traders should build their own models and strategies, generating their own odds for a particular betting market. When the odds in the model differ widely enough with a compared a bookmaker or another bettor on an exchange, it can be assumed to be a good value bet.
Building a superior model or taking advantage of information asymmetry can also be a good way to find value. If a model or inside information gives the bettor a clearer grasp of true probability than the bookmaker then profits are available.
The importance of the long run
When value betting, it is important to bet for the long-term. Even with the clear edge on the coin toss at 2.2 Odds, there is still a 50% chance that the bettor loses. This is when a
Staking strategy becomes important as bankrolls can be decimated by over staking, even on bets that offer value.
How often do professional bettors get paid?
In the long run, this strategy pays off. After 100 coin flips staking &10 the bettor would expect to have &1100 from 1000 staked. In a similar way, if a sports bettor can find enough value bets they will win in the long run.
Know the importance of odds
Value is all about finding the best odds and no bookmaker offers better value than Pinnacle. If bettors take lower odds from elsewhere then a value betting strategy becomes less profitable or even loss-making.
Some bookmakers ban winners, making a long-term value betting strategy impossible. Pinnacle operates a winner’s welcome policy so value bettors can make the most from their edge.
In conclusion, value betting is an essential skill for bettors, although not a very popular strategy, if harnessed well, it could be a gold mine for a diligent punter. One should also not forget that value bet is more profitable when one operates multiple accounts with various bookies. In doing these, a bettor will be able to explore the different gains these bookies offer.