Understanding Value Betting: How to Make Smart Bets

Value betting is a betting strategy that aims to identify betting opportunities where the true odds of an event occurring are higher than the bookmaker’s odds. This discrepancy between the true odds and the bookmaker’s odds allows bettors to place bets with positive expected value – meaning potential profit. Value betting requires an understanding of concepts like probability and expected value to consistently identify profitable situations.

What is Expected Value?

Expected value (EV) is a mathematical concept that determines the long term profitability of bets. It is calculated by multiplying the probability of an outcome occurring by the payout of that outcome. A bet has positive expected value when the EV is greater than the stake amount. This means the bettor stands to make a long term profit. Identifying bets with positive EV is the key to successful value betting.

How to Calculate Expected Value

To demonstrate expected value, consider a coin flip bet:

Probability	Payout
Probability of heads = 50%	Payout per winning bet = £2
Probability of tails = 50%	Stake per bet = £1

EV per bet on heads = (Probability of heads) x (Payout for heads) = 50% x £2 = £1

EV per bet on tails = (Probability of tails) x (Payout for tails) = 50% x £2 = £1

Total EV = EV heads + EV tails = £1 + £1 = £2

Since the total EV of £2 is greater than the stake of £1, this bet has positive expected value. The bettor can expect to profit long term.

Finding Value Bets

Expected value calculations illustrate that profitable betting relies on finding discrepancies between the true odds and the bookmaker’s odds. This allows bets to be placed where the EV exceeds the stake amount. Value bets can be found by:

• Comparing odds across multiple bookmakers. Odds can vary between different bookmakers based on the liabilities they are willing to take on. By comparing the odds for the same event at different bookmakers, value betting opportunities may emerge.
• Modelling probabilities yourself. By analyzing factors like team strengths, injuries, and historical results, you can build your own probability model for the likelihood of outcomes. If your estimated probabilities differ substantially from the bookmaker’s odds, a value bet may exist.
• Identifying mistakes in bookmaker’s odds. Bookmakers can sometimes make errors setting their odds, especially with complex events like accumulators. Identifying these mistakes allows value bets to be placed.
• Taking advantage of offers like free bets. Free bets allow you to place a bet without risking your own money. This instantly creates a value betting opportunity.

The key is determining instances where the bookmaker has underestimated the true probability of an outcome occurring. This creates an opportunity to bet with positive expected value.

Advantages and Risks of Value Betting

Used appropriately, value betting offers some advantages:

• It provides a mathematical framework for evaluating bets. The expected value calculation gives an objective measure for determining if a bet is profitable in the long run. This removes guesswork and gut feelings.
• Bets are only placed when there is projected profit. The EV calculation ensures you only place bets with positive expected value, avoiding unprofitable wagers. This helps control losses.
• Discipline and careful research allows for profits long term. Value betting depends on thoroughly researching betting opportunities and maintaining discipline to follow the strategy. This rigorous approach makes long term profits achievable.

However, there are some risks to consider:

• Requires substantial research and analysis. Significant time and effort is required to research probabilities, analyze data, and compare odds across bookmakers. This level of analysis will not appeal to more casual bettors.
• It can take large sample sizes of bets before profit materialises. While value bets project profit in the long run, variance means you could lose money over tens or hundreds of bets before positive results emerge. Bankroll management is crucial.
• Bookmakers may restrict accounts of successful value bettors. If you consistently win through value betting, bookmakers may limit the stakes you can place or even close your account. This restricts how much profit can be made.

Summing up, value betting aims to systematically identify and place bets where the true odds exceed the bookmaker’s odds. This creates profitable situations with positive expected value. But successfully using value betting strategies requires an understanding of key concepts like expected value and the self-control to follow a tactical approach. When used appropriately for entertainment, value betting can make sports betting more rewarding. But discipline is required to overcome the inherent variance and gradually accumulate profits long term.