There is one single thing which is vital for your sports betting success. All professional bettors are doing it without exception. That is making value bets by identifying value situations to exploit.
This article explains the most important aspects of value betting. Understanding the main idea behind this term and putting it to regular use is really that important if you are serious about your betting.
What is Value Betting?
Value betting is identifying a sports event with a value situation and taking advantage of it. A value situation is when the bookmaker offers odds on a certain outcome which imply a probability that is lower than the actual probability of that outcome occurring.
The specific market with the value situation doesn’t matter. It could be the 1X2 market in a football match, the spread market in the NBA, or the winner outright in a golf event. As long as the odds are higher than what you believe they should be, you have to place a bet on that outcome.
Value Betting Examples
I am sure everyone is tired of the classic coin toss example but it is such for a reason. It’s the most simple way to illustrate what value betting is.
If we toss a coin under fair circumstances, there’s a 50% chance that it lands on heads and a 50% chance of it landing on tails.
Bookmaker odds are pure representations of probabilities. Dividing 100 by the real chance an event occurs gives us the true accurate odds. In this case that is 100 / 50% = 2.00 for both heads and tails.
If you are offered such prices, in the long term you will just waste your time with these bets. Over a good sample of, let’s say, 200 coin flips, an even distribution is expected so you will get 100 times heads and 100 times tails. Betting $10 every time on heads means you’ve won $1000 when heads occurs and you’ve lost $1000 when tails occurs.
In such cases with an even chance for the opposing selections, bookmakers usually offer prices of 1.90 for both. This implies a probability of 52.6% which is higher than the real probability of 50%. They do that because it’s the way they make their money. The difference of 2.6% is the commission they take from you by providing their services for your betting. You should never bet on such offers as you will lose money in the long term.
Now assume a bookmaker offers you odds of 2.20 for tails. This implies a probability of 45.4% but you know the true probability is 50%. You should bet on this as long as they are offering such a bet to you, all day long. In the long term you’ll make good fortune from that. In the example above with the 200 evenly distributed coin flips with a $10 stake each, winnings accumulate to 100 * 10 * 2.20 = $2200 whereas lost bets accumulate to 100 * 10 * 2.00 = $2000. This means you’re expected to win $200 by just betting on an undervalued offer.
What is the chance that the sun will rise tomorrow? In theory you never know, but it’s safe to assume the chance is 99.99999%. Imagine a bookie offers you a price of 1.20 that the sun will rise tomorrow. This implies a probability of 83.33% which is way lower than the real one. Such a hypothetical offer would be a gold mine.
Too Good To Be True?
The cases explained above where you can make money without having to even think about it are very rare. Bookies are not stupid. There are two main reasons why you could be so fortunate to stumble upon such opportunities.
The second possibility is if you assume someone is foolish enough to place a huge stake on odds of 1.90 on a coin toss outcome. Let’s say this guy bets $5000 on tails. This would put the bookmaker in a big liability in case that outcome happens. To balance their risk exposure, the bookie will increase the odds on heads above 2.00 to a certain price that still accounts for their commission. The lucky bettors who see such odds will bet on heads until the liability for the bookies is even between the two possible outcomes again so that they are at a profit regardless of the result. At that point the odds will return to 1.90 for both selections.
These examples were given so that you could easily understand the concept of value betting. Now let’s proceed to the more complicated part.
Value Betting In Sports
Betting on sports is a different animal. Unlike coin tosses, roulettes and other similar betting opportunities where you know exactly what the true odds for each outcome are (unless it’s rigged), it’s much harder to come up with the true odds for a sports event. The reason is sports events have a multitude of factors that can influence the outcome. Injuries, weather conditions, spectators, referees, player discomfort, good/bad form are just a few such variables.
I’ll give an example. The pre-match winner odds on the 2019 French Open first round match between John Millman and Alexander Zverev were 6.50 for the Aussie and 1.11 for the reigning ATP Finals champion. In general, bookmakers never intend to offer us value bets at all. As discussed, because of the fact they need to account for their commission in the calculation, they always aim to offer us odds less than the true value.
Despite the fact bookies have whole trading departments with the purpose of setting the odds right, they frequently set them in accordance to a few key elements. The first one is the place in the standings. With Millman being 56th in the ATP rankings and Zverev 5th, there is a huge “suggested” disparity between the players. Moreover, this significant gap in the rankings, combined with the titles won historically by the two players, is a reason for most of the incoming bets to back Zverev to win. Those factors mainly contribute to the 6.50 to 1.11 line. This is where shrewd bettors who look for value come in.
People that follow the ATP on a weekly basis know all those other side factors that can influence the outcome of the match. Zverev was in a huge slump after his ATP Finals triumph. His results were bad and he was losing in the initial rounds of the tournaments he played up until mid-May. He personally admitted his confidence was nowhere to be found at that time. In order to restore it, he was playing every single week during the clay court season, including the week before the French Open. He managed to win ATP Geneva but spent a lot of time on court, while his final match was suspended twice due to rain and lasted for almost 6 hours. He couldn’t take his flight to Paris and travelled the next day, while the French Open was already underway, and it’s important for tennis players to adjust as much as possible to the conditions at each specific venue prior to their matches.
Moreover, Zverev has a history of under-performing at Grand Slams. He almost always loses in the first week of these major events. In the 2018 French Open he managed to sneak into the second week for the first time but only after several gruelling 5-set battles. All of these factors combined hinted at another disappointing tournament for the German. In addition, Millman is not a good draw for the first round as he is more than competent on clay and plays his heart out against the top guys. He beat Roger Federer at the 2018 US Open.
When you take all of these variables in mind, you could clearly see that Zverev was overvalued at 1.11 whereas Millman was undervalued at 6.50. Odds of 6.50 imply a probability of 15.38% while people that follow the ATP closely could definitely agree that the Aussie had higher chances to win this match. A bet on Millman represented a value bet.
In the end Zverev barely won the match in 5 sets again, proving that he was far from the heavy favorite implied by the odds. It’s true that in this case people that backed Millman lost their stake. However, it is very important for you to remember the nature of value betting that I explained earlier. Over the long term this kind of bet will bring you money. If the two players played this match 100 times, the more realistic distribution would be around 65 wins for Zverev and 35 wins for Millman. This means that if you took Millman at 6.50 every time, you would make a great profit.
Shrewd bettors always think long-term and are not disappointed over a loss or a temporary losing streak. They know that making value bets will serve them well after a big enough sample of bets.
How To Identify Value Bets In Sports
Rookie sports bettors are usually just betting on the outcome they think will happen without caring about the odds they are offered. Such a bettor may see the tennis match that we analyzed above and fancy Zverev to win, betting on 1.11. In the long term this bettor will suffer a financial loss.
Value betting is not about simply betting on which outcome will happen. It’s about identifying undervalued situations and taking advantage of them. In the case above that would be a bet on John Millman. Even if you believe that Alexander Zverev will eventually win the match, a bet on Millman would be the value bet for you because the odds of 6.50 on him are much higher than they realistically should be. Such betting will serve you well in time.
Value betting in sports is not restricted to favorites or underdogs only – it works for both. John Millman on 6.50 is an underdog but also a value bet. If Real Madrid are playing at home against Rayo Vallecano they will be a heavy favorite. You would assess the fair odds on them winning should not exceed 1.30. Imagine you see a bookmaker offering 1.70 on them. This would be a great value bet.
Unfortunately, unlike the coin toss example, there’s no definitively correct way to determine the exactly fair odds in sports betting. This is subjective and will be different for each person. You may assess that the real odds for Real Madrid to win a certain football match are 1.20. I may assess them at 1.50. Our individual assessments are derived from the information and knowledge each of us has and accounting for all sports variables that may influence the game. If a bookmaker offers odds of 1.40 on a Real Madrid victory, this would be a value bet for you but not for me.
The best way to identify value bets is to become an expert in a specific sport or a single league within that sport. Let’s say you rigidly follow the English Premier League – you know every team inside out, watch every game, read every news article, watch all pre-match press conferences, browse through individual teams’ fan forums etc. Then you see odds for Man Utd under Jose Mourinho are 1.30 to beat Burnley at home. The odds on Man Utd most likely are so short because they are a very popular team which the masses bet on. Often fans of the team will back them with a flutter without caring whether the odds represent the true probability of their team winning. Because of the fact bookies usually receive much more bets on Man Utd in such a game, they are balancing their books and that’s why Man Utd are such heavy favorites.
However, you’ve watched all the games and you know they weren’t having such great performances to justify odds of 1.30. They’ve often struggled and had many draws at home. In this case you are betting on the opposite selection – a X2 double chance on Burnley or The Draw. If you believe Man Utd are underpriced, most of the time that would mean that the opposite outcome is overpriced and presents betting value.
Being a specialist in lower less popular leagues presents even better opportunities. The Premier League is a competition watched by billions every week and usually the odds that bookmakers offer on most of the games are fair, thus it’s hard to extract value from them. But if you are an expert, let’s say, in the Slovakian football league, you have higher chances. In such smaller leagues bookies are slower to react to news because a very niche part of the football spectators is interested in that league.
There may be a match between two evenly matched teams and the bookmaker may price both of them at 2.60. Imagine that the coach of Team A says that he will rest most of his starters because of a more important Europa League game in mid-week. At that very moment a wager on 2.60 for Team B would be a value bet, because as soon as you hear these news you may assess the real odds for Team B to have changed to around 2.10.
Another example is the start of the season. Imagine Team A has 4 wins in their first 4 games, while their opponent, Team B, has had 4 losses in their first 4 games. Bookmakers will most likely price the odds predominantly influenced by the league standings and Team A will be a substantial favorite. However, you’ve watched the games and you know Team A has been kind of lucky to achieve these 4 wins, whereas Team B has been rather unlucky, having more chances than their opponents in the first 4 games, but failing to execute them. You may believe that in the following game luck will change sides because the two teams are much more evenly matched than the odds suggest them to be. A bet on Team B or The Draw represents a value bet.
Another good way to identify value bets is if you see considerable discrepancies between the odds offered for the same outcome at different bookmakers. In such a case, it’s almost certain that one of them is wrong. The next step is to find out which bookie is wrong. If you can’t tell straightaway using your sports knowledge, compare the odds to several more bookies. Chances are almost each of them will have odds similar to one of the first two bookies, showing you the other one has their odds out of line to the market (meaning, wrong). Betting at that bookmaker would be the value bet.
Expected Value (EV)
You already know what value means in sports bets. Here I’ll just show you a simple formula that determines whether a selection has value or not.
Value = (Probability * Odds) -1
Using the tennis example above, I assess Millman’s true probability of winning the match to be 35% while the bookmaker is offering me odds of 6.50.
Value = (35% * 6.50) – 1 = 2.275 – 1 = 1.275
Anything above zero is a positive expected value (+EV) and represents a value bet.
The calculation for Zverev considering our expectations of a 65% chance winning the match and odds of 1.11 offered by the bookie are:
Value = (65% * 1.11) – 1 = 0.72 – 1 = – 0.28
Anything below zero is a negative expected value (-EV) and would be a bad bet on our behalf.
Your goal is to make +EV bets as opposed to –EV bets in the long term, regardless if you are in a temporary losing streak. Luck will even out after a substantial amount of sports bets and following this strategy will earn you money.
Fundamental vs Technical Value Betting
There are two methods to determine whether a certain pick has value.
The first one is fundamental value betting. This is similar to what I talked about earlier with regards to having expertise in a certain sport or a specific niche league. Here you use your own judgement by possessing superior timely information about the games compared to the bookmaker. As a result, you are able to identify value in the odds before the bookmaker reacts and corrects them to the level that you believe represents the actual probability.
The second method is technical value betting. Here you use the assistance of pieces of betting software or tipsters which claim to have profitable picks or strategy.
It’s up to you to decide which way suits you best. There are tipsters or software solutions which are good, and there are many which possess false claims. I personally favor the fundamental method towards value betting.
Strive For Value Consistently
As the whole betting itself, making value bets is a marathon, not a sprint. You will lose value bets but this shouldn’t worry you because, provided that you’ve identified the value correctly, in the long term such bets will bring you profit.
Value betting is indeed one of the most crucial strategic concepts in sports betting. Stick to that strategy diligently, don’t go overboard risking inappropriate amounts of your bankroll even when you’ve identified value, always bet within your means, and you will already be not just walking, but running on the path to success.
That’s what shrewd bettors do.