Even if you are new to sports betting, you have probably heard from more experienced players such terms as value bets.
What is a value bet?
To play successfully, you need to understand what the value bet is. A value bet arises in a situation when the bookmaker's odds for any event are higher than the real probability of the event (real probability odds).
So let’s consider the example of a tennis game between Novak Djokovic and his clone.
There are two possible outcomes in this game - one player wins or the other wins.
The odds of Novak Djokovic winning are the same as his clone's chances of winning - 50% probability for each of them. If we convert this percentage into decimal odds, then we get odds of 2.00 for each of the outcomes, e.g 100/50 = 2.00.
Now let's imagine that we have two bookmakers. Bookmaker A is offering to bet on the real Djokovic with odds of 1.80, and Bookmaker B is offering to bet on him with odds of 2.20.
Let's say we want to bet on the real Djokovic. And which one of these bookmakers is offering us value? We can calculate this as follows: the probability of an event (in percentage) is multiplied by odds and minus 100%.
Bet Value = Probability Odds - 100%
Example: Bookmaker A is offering odds of 1.80.
50% x 1.80 – 100% = –10%
It turns out that Bookmaker A is offering us less than true value betting. And this is not a value bet.
Bookmaker B offered us odds of 2.20.
50% x 2.20 – 100% = +10%
The second bookmaker offered us a value bet, the value of which is 10% higher than the real probability of this event. So you should bet here.
Why does the bookmaker always win?
The above situation can only occur in an ideal world. This does not apply to our planet. The bookmaker will never set odds that are higher or equal to the real (in his opinion) probability of the event. He is not a philanthropist – he makes money. Value bets in the real world are bets on outcomes that the bookmaker underestimated and thus offered higher odds than it should be.
If we go back to Djokovic's match against his clone, then the real bookmaker will offer you odds of 1.90 for Djokovic #1 and 1.90 for Djokovic #2, or even less.
For example, the bookmaker accepted bets of $100 on Djokovic #1 and the same amount on Djokovic #2. A total of $200 was accepted. The players are equal in strength, the odds are the same for each - 1.90. Let's say the real Novak dislocated his finger and his clone (Djokovic #2) won. The bookmaker calculates bets on Djokovic #2 with the odds of 1.90 and pays $190 to the players who bet on him. But he accepted $200! This difference - in this case, it is $10 - is left to the bookmaker.
This amount is his commission, also called margin. Thus, the bookmaker earns by offering customers bets that are lower than the actual value.
In the future, we will analyze the concept of the betting business in more detail.
How to identify the value bet?
So, we have an NBA match where the odds for Miami Heat’s victory are 3.00. In other words, the probability of this team winning, according to the bookmaker, is 33.33%.
Now suppose that, in our opinion, the real probability of Miami Heat’s victory is not 33.33%, but 40%! Now let's estimate the value based on this analysis:
40% x 3.00 - 100% = 20%
The odds of this bet are quite high, and if you correctly assessed the probability of Miami Heat winning, then you have found an excellent value bet! If in your opinion, the probability of Miami Heat’s victory is lower than the 33.33% declared by the bookmaker, then this bet will not have value. And you shouldn't place a bet.
How do we find value betting situations?
If the bookmakers are not going to offer us value bets, where do we get them? The answer is to carry out analytical work to determine the real likelihood of a particular outcome or to read predictions for sports, for example, from the Meta Reviews team. But the surest way is to follow the market. In most cases, dropping odds for a particular outcome show that it will come true. Your task is to find a bookmaker that “did not follow” the market and continues to give odds significantly higher than the market ones.
This is one of the ways that successful players use.
In the following chapters, we will take a closer look at the various gambling strategies that will help you find value bets. At this stage, you must understand the very essence of determining a value bet – the real probability of an outcome (determined by you) should be higher than the bookmaker's odds for this outcome.