Value betting is a sports betting strategy which involves finding opportunities where the odds offered by a bookmaker are higher than the true probability of that outcome.
In other words, it’s the ability to spot bets that give you an advantage because they’re priced lower than they should be, considering the likelihood of the event happening.
So, what makes a bet a value bet, and how can you spot it? Let’s explore this essential betting strategy step-by-step.
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What is Value Betting?
Value betting is about identifying bets where the probability of a given outcome is greater than the odds offered by a bookmaker.
It’s a concept borrowed from finance, where investors look for assets that are “undervalued” or priced below their actual worth.
In betting, it works the same way: a value bet is one where the odds offered are better than the probability of the event happening.
The fundamental idea is simple: if the chances of something happening are higher than what the odds suggest, then you’ve found a value bet.
For example, if a football team has odds of 3.0 (implying a 33% chance of winning), but you think they have closer to a 50% chance, you’re looking at a potential value bet.
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Probability vs Odds
To be able to spot a value bet, you need to know how probability and odds relate.
Probability is simply the likelihood of an event happening, expressed as a percentage. For example, an event that’s certain to happen has a probability of 100%, while one that’s impossible has 0%.
Odds, however, are how bookmakers express or present that probability.
Betting is fundamentally about assessing this likelihood and then using it to make informed wagers.
Value betting comes into play when the odds offered don’t align with the actual probability of an event. This means there’s potential for profit if you know how to interpret odds and convert them into what’s called implied probability.
Implied probability basically means the likelihood in percentage terms of an outcome occurring as implied by the bookmaker’s odds.
You can learn more about how to convert odds to their implied probability in our betting guide on Arbitrage in Sports Betting, which is a concept closely related to value betting.
But, staying with the focus of this article, we can illustrate how value betting works with the example of a coin toss.
A fair coin has two possible outcomes (heads or tails), each with a 50% chance. Since both outcomes are equally likely, the odds for either outcome should be 2.0.
This would result in a “break-even” scenario over time where the expected value is “0”, meaning you’d expect to neither gain nor lose money if you bet on heads or tails in an infinite number of fair tosses.
But if someone offered you odds of 2.15 on heads, this would be considered a value bet because the odds offered are higher than the actual probability.
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How to Calculate Expected Value in Betting
In betting, expected value (EV) is, basically what you can expect to win or lose on average if you placed the same bet over and over again at the same odds.
If the EV is positive (+EV), it means you’re likely to make a profit in the long run; if it’s negative (-EV), you’re more likely to lose over time.
So, if you’re serious about making money in betting, spotting value and aiming for positive EV should be your goal with every single bet.
Here’s the formula to calculate the expected value (EV) of a bet:
- Expected Value = (Amount won per bet x Probability of winning) – (Amount lost per bet x Probability of losing)
Using our example from above, if you place a ₦100 bet on heads at odds of 2.15, you can calculate the EV as follows:
- (115 x 0.5) – (100 x 0.5) = 107.5
This means that for every ₦100 bet, you’d expect an average profit of ₦107.5 because the odds offered give you better value than the actual likelihood of winning.
100% Welcome Bonus Up to €100Why Bookmaker Odds Are Usually Not in Your Favour
If finding value bets sounds easy, remember that bookmakers make sure to include a margin in their odds to keep the upper hand.
This is why a bookmaker would likely offer odds of 1.90 for both heads and tails on a coin toss rather than 2.0, representing a 5% margin for the sportsbook.
With these lower odds, your expected value would turn negative, meaning you’d gradually lose money if you kept betting.
So, if the odds are always stacked against you, how can you make profits from sports betting?
Well, because sports involve variables that can’t always be precisely quantified (like injuries or weather), bookmakers can’t be perfect at setting odds.
This is where you, as a bettor, can find an advantage – by identifying situations where the bookmaker’s odds don’t fully account for the real probabilities of the event.
100% Welcome Bonus Up to €100How to Identify Value Bets
Identifying value bets is a skill that requires practice, analytical thinking, and a little intuition. Here’s a closer look at some strategies that can help you develop this ability:
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Set Your Own Odds
To get started with value betting, you need to calculate your own odds for a given event before checking the bookmaker’s prices. This involves gathering as much information as possible, such as player form, team stats, weather conditions, and other variables that might impact the outcome.
When you calculate your own odds, compare them with the bookmaker’s. If you see a big difference and think the odds offered are undervaluing an outcome, you may have found a value bet.
Betting exchanges make this process even more flexible by allowing you to set your own odds or to bet against others who may have different views on the game’s outcome.
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Think in Probabilities, Not Favourites
Value betting isn’t just about backing favourites or betting on underdogs for betting’s sake.
It’s about identifying opportunities where the odds don’t fully match the probability of an outcome. This means shifting your mindset from “Who’s most likely to win?” to “What are the true chances of each outcome happening?”
Let’s say a match between two football teams has one clear favourite. Instead of assuming they’ll win based on reputation, consider both teams’ form, injuries, and head-to-head stats.
You’re after a probability assessment rather than a gut feeling about who might come out on top. Sometimes, an underdog might offer better value if their odds don’t reflect their real chance of winning.
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Separate Emotion from Decision-Making
It’s easy to get emotionally attached to bets, especially if you’re a fan of a particular team or player. But value betting works best when you rely on data and logical reasoning rather than personal preference.
Mathematical modelling can help you create a rational system for assessing probabilities, disconnecting your decisions from bias or attachment.
For example, let’s say you’ve calculated that a certain team has only a 40% chance of winning, but the odds offered imply a 30% chance. Even if you’re a fan of the other team, a value bettor will back the team with the higher chance if the odds make it a profitable decision. Value betting requires that kind of commitment to logic over preference.
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Specialise in Niche Markets
If you’re serious about value betting, it often pays to specialise. Bookmakers meticulously balance the odds for the more popular leagues and sports, making it harder to spot value.
However, less popular leagues or sports can sometimes offer more frequent value betting opportunities, either due to less data available or less attention from the bookmakers.
When you understand a particular sport or league well, you’re more likely to spot odds that don’t align with the true probabilities.
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Test and Reassess
Once you start placing bets based on your calculations, keep a record and regularly reassess your approach. Track your successes and identify patterns in your wins and losses.
If a particular model or system you’ve developed consistently underperforms, be ready to tweak your methods or consider other factors you may not have accounted for.
Value betting is a journey of constant refinement. Just like successful financial analysts adjust their models based on market changes, value bettors must stay flexible and open to learning from experience.
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Putting Value Betting into Practice
As we have now established, betting odds are really just how bookmakers express probabilities of events’ outcomes.
So, to make value betting work for you, you need to approach betting from the standpoint of probability-based thinking and positive expected value – and this guide has provided you with the tools to do that.
Rather than betting on the favourite or going with your instincts, calculate the true likelihood of an event and only bet when you find odds that offer you an advantage.
So, you need not be afraid to go against the bookmakers when you spot a value bet opportunity.
Developing your own models and keeping records of past bets can also help you refine your strategy and better understand where value lies.
When you approach betting with a value mindset, you’re setting yourself up for profitable results over the long term.
For more expert strategies on mastering sports betting and achieving consistent profits, be sure to explore our comprehensive betting guide.