Value in Sports Betting
To make money in the long term, a bet needs to be ‘value’. It is safe to say that value is the single most important factor in being a successful long-term punter. Without value you will almost certainly be down, whilst if you are able to identify it, you are likely to be in profit.
The definition of a value bet is where the odds that you take are higher than the true likelihood of that outcome occurring. The easiest way to illustrate this is with the toss of a coin.
The probability of the coin toss landing on heads is 50%, which is an evens bet, or 2.0 in decimal terms. Were a bookmaker to offer you those odds then after an infinite number of bets placed on heads you will be right back where you started. No win, no loss.
If a bookmaker offered you odds above evens, this bet is a value bet, that is, whilst the true odds are 2.0, you are being offered 2.x. The greater the ‘x’, the greater value.
The trick, or skill to sports betting is firstly identifying value, and secondly calculating how much that value is. One way is arbitrage. Sports arbitrage identifies opportunities where the punter is able to cover every outcome in an event and guarantee themselves a profit…no matter the result. By definition one of these bets must be value otherwise the opportunity would not exist. Calculating the % return for the arbitrage bets is one way of roughly calculating how much value is in that bet.
If you are able to 1) identify value and 2) calculate how much value you have, you can then use something called ‘Kelly Criterion’ to decide what % of your betting bank you should use on that bet. Kelly is all about value and applying that value to your bank roll. Whilst the following is simplistic, the basic concept is correct in that, with Kelly, the greater the value, the higher the percentage of your bank roll you should bet. It is common for gamblers to only bet a fraction of Kelly to due their appetite to risk and fear of an extended losing run…the lower the fraction, the higher the likelihood of keeping some of their bank intact.
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