What is Value Betting?
Value betting is a strategy in sports betting where bettors seek out odds that are higher than the actual probability of an event occurring.
In other words, it’s when you find a bet where the odds provided by a bookmaker imply a lower probability of an outcome than you believe is realistic. By consistently betting on these “value” odds, you aim to gain a long-term edge over the bookmaker.
Here’s how value betting works:
- Identify Value: Compare the odds given by the bookmaker to your own estimation of the probability. For example, if you assess that a team has a 60% chance of winning (equivalent to odds of 1.67), but the bookmaker offers odds of 2.0, there’s value because you believe the team is more likely to win than the odds suggest.
- Calculate Expected Value (EV): Expected value helps measure the potential profit of a bet. The formula is:EV=(Probability×Odds)−1EV = (Probability \times Odds) – 1EV=(Probability×Odds)−1A positive EV indicates a profitable bet in the long run.
- Place Bets Consistently: The value betting approach relies on placing bets only when you spot positive EV and doing so consistently over time. This strategy assumes that, despite losses, the winning bets will yield a net profit as they have a genuine probability advantage.
- Avoid Emotional Decisions: Value betting is data-driven and doesn’t rely on luck or hunches. Success comes from making calculated, objective decisions based on probabilities.
Value betting can yield a sustainable profit, but it requires discipline, a clear understanding of probabilities, and often access to sharp odds analysis tools or databases to find discrepancies.
Example of value betting
Chelsea are playing Liverpool in the English Premier League.
- Your Bitcoin betting site offers you odds of 2.50 on Chelsea winning (3/2 in fractional odds and +150 in American odds). With odds of 2.50, most bookmakers estimate that Chelsea have a 40% chance of beating Liverpool. This might seem like a solid bet.
- However, after doing some research, you realize Liverpool have been in top form this season, and Chelsea’s key goal scorers are injured and won’t be playing in the upcoming match.
Do you still take this bet? That decision is up to you, but the initial 40% probability might be inaccurate. The real probability could be closer to 30%. A tactical bet on Liverpool could potentially bring a bigger win.
3 key stats about value betting
- Long-Term ROI of 2-5%: On average, disciplined value bettors can achieve a return on investment (ROI) of 2-5% over a large number of bets. This percentage varies depending on factors like odds, accuracy in probability estimation, and the consistency of positive EV bets.
- Win Rate Variability: While the win rate of value betting typically falls between 45-55%, the critical factor is the profitability from positive expected value, not simply the win rate. A win rate below 50% can still be profitable as long as the bets have positive EV.
- Sample Size of 1,000+ Bets for Reliability: To achieve consistent profitability, value bettors usually need a sample size of at least 1,000 bets. This volume allows for the law of large numbers to work in their favor, smoothing out short-term volatility and increasing confidence in the long-term positive EV.
