Value Bets

Understanding value betting requires understanding betting odds and odds facts. Value betting deals with sports betting odds in a more scientific, and comprehensive way through the use of statistics.

In our previous articles, we have talked about odds and probabilities. We have already elaborated on the probabilities of the potential outcome of an event and their implied returns as well as their equivalent profit margins.

Value betting deals with betting in a more scientific, and comprehensive way through the use of statistics. When you bet on value, you don't pay attention to criteria like league table, form, history, injuries, etc. The "normal" way of betting is first finding an object you believe in, then checking if the odds is all right.

Valuebetting requires another way of thinking. In fact, valuebetting is the opposite of conventional betting. It's not about picking objects, but picking odds !! It assumes that all the attributes and particularities of a game (e.g. ranking in the league, team’s potential, team’s psychology, team’s players current status etc.) are already depicted in the offered odds!! This means that you don't nescessarily have to believe in the team you put your money on. As long as the odds presented are better than the strictly mathematical chance a team has of winning the game, it's a valuebet.

Calculating the Value Bet

Value is a quantitative figure which assesses the return. It is an index which indicates the participating players expected profit. It uses both the returns as well as the probabilities of these points. The value of an outcome is provided by the formula

Value=Odds * Probability/100

If the figure of value is greater than 1, then we have a Value Bet which means that in the long run, a punter who places value bets will be more profitable than a punter who bets at random or on a hunch.

We need to pay attention to the fact that the game head/tails has clear probabilities of 50-50. In betting, the probabilities are harder to estimate due to the number of non-controllable factors playing a role on the outcome (weather, players psychology etc.). However, a good estimation of the probability of a specific outcome for an event could be derived from the odds of bookmakers.

In Oddsandstats.com we provide a list which odds from various bookmakers. This allows us to calculate the mean of all these odds and have a fairly accurate approximation as to the probability of an event based on the cumulative analysis of all bookmakers.

Let’s go through an example (we will not be extremely accurate with our approximations).

	1	X	2	Prob 1	Prob 2	Prob 3
Book 1	1,45	3,60	7,00	62,11	25,02	12,87
Book 2	1,40	4,10	10,50	67,81	23,15	9,04
Book 3	1,44	3,75	6,00	61,58	23,65	14,78
				63,83	23,94	12,23

Book 2 gives a return of 10,5 to outcome 2. The probability of point 2 is 12,23. Performing our analysis we can clearly see that we do have a Value Bet at the outcome 2 10,50*12,23/100=1,28.

Determining the stake of a Valuebet

Once you've found a valuebet, you need to determine how much of your funds to allocate on this. One way of deciding is to use the famous John L. Kelly formula to determine the optimal stake for your bet. The formula looks like this:

A = P - ((1-P)/(odds-1))

A = Advantage (this represents the % of your betting fund to place on the event)
P = Probability (in decimals) for an outcome (based on the average odds of the bookmakers or your estimate)

Therefore, we can conclude that:

- The comparison of the odds from various bookmakers allows us to have a better understanding of the probability of each outcome.

- According to the statistics and the laws of probabilities, the value bets in the long run provide higher profits than bets based on hunches or random bets

- Big favourites are rarely good objects for valuebets, due to the bookies' fear for large payouts if the favourites should win. Big names like Man Utd, Juventus, Inter, Milan, Barcelona, Bayern Munich, are rarely given good prices by the bookies, because the bookies know that the common punter bet on the big names (as they often seem to win their games, and they have a huge following).

- Because bookmakers are afraid to lose large amounts, they will not provide value bets on favorites since most punters bet on them. The real value bet is often found in the form of underdogs.

- Therefore, value betting is a better strategy during the beginning and the end of a season as results are more unpredictable and underdogs win more often (see above point).