Value bet in sports betting explained

Understanding what a value bet is when wagering on sports is fundamental. This type of betting applies calculation to your wager rather and can turn kind of random bets to a more mathematic way of betting.

We are now aware of the fact: odds of sport event results are calculated in order to be mathématically favorable to the bookmaker, therefore unfavorable to the bettors.
Quite simply because the theoretical odds are defined and calculated in such a way that the mathématical expected value of winning is zero (see also simulator / profit calculator): on average, over a large number of games bet with this theoretical odds, we neither lose nor gain much.
Then, the bookmaker takes his commission from all the bets, simply by lowering the probabilities they offer (or, equivalently, by overestimating odds).
In which case then to bet ? with a chance of winning of course...
How to distinguish sporting events with favorable odds? What math calculations show that ?

What is a value bet ?

A value bet, or a "profitable bet" is a bet where the likelihood of a given outcome is higher than what the odds offered reflect.
Technically, this means that the mathematical expectation is positive.
Value betting, therefore, means betting only when your chances of winning are higher than the bookmaker estimated, that is, in other words, the bookmaker has undervalued probability of the outcome.

We have seen that if the event odds are correctly calculated, i.e. if the implies probability correspond to the effective probability of the event outcome, then bets will have no effect in the long term (mathematical expectation is zero). Worse, while the bookmaker pick up a commission, profits in such configuration will surely leads to loss, on average in the long term.
If we seek to earn money, overall and in the long term, we should only bet if we estimate that the probability given by the odds (the reciprocal of the odds therefore) underestimates the actual probability (which we estimate by ourselves, or with the help of tipsters). In this case, which is therefore called value bet, yes, on average over a large number of games of this type, we could earn money.

For example, if a bookmaker offers the odds of 1.9 for a team playing in a match, while I personally (or with help, tipsters, friends, information, statistics, etc.) estimate that this team has more than one chance out of two to win, more precisely has for example a probability of 60% (3 chances out of 5, cf. also the conversion table), which would correspond to a rating of

c = 1/60% = 1/0,6 ≃ 1,66

so I believe that the bookmaker underestimates the probability, and therefore overestimates the odds, and I have to bet !
The odds of 1.9 correspond to a probability of 1/1.9 ≃ 52%. Thus, on a large number of such bets, with a 10% difference (one chance in 10) between my predictions and the one of the bookmaker, I can expect to earn a 10% net profit.

We will then come back later to that other question: how much to bet ? in order to mathematically calculate the correct stakes according to odds & probabilities.

How to identify a value bet ?

Once you understand how to calculate a value bet, you can apply this to your wagers.
To identify a value bet, you must estimate yourself (or with the help of pros, tipsters, or other sites) the probability of an event outcome. I recommend doing this before reading the odds offered by the bookmakers, in order to convince yourself honestly, without being influenced. It is very easy indeed, after having read the odds announced, for example 1.8 for a player, to say to oneself "hey, I would say more" (like a beautiful "I knew it" afterwards and when one does not hadn't announced anything before). This natural reaction of our mind is a bias in our reasoning ability and is called an anchoring bias: a difficulty we encounter in letting go of our first impression,

Writing your own odds/proba predictions beforehand allows you to avoid this well-known bias (see for example this wikipedia page).
Next, we compare our odds estimates, remembering that probability is the reciprocal of odds. All that remains is to select the bets that seem overestimated by the bookmaker.
Finally, you should not hesitate to browse the odds offered by several different bookmakers. Indeed, it is likely that the odds offered differ from each other, and you will then also be able to select the bet from the bookmaker where the value bet has the greatest difference.

Where to find Value Bet ?

The question is somewhat extravagant! Indeed: knowing how to find a value bet is the exact definition of a good bettor ! Tipster get paied for their capacity to find good value bets...
All the know-how, the experience, the technical knowledge of the players and teams in play, of the history of the matches, of the location (at home or not for example, or the playing surface, ...), come into game. And, of course also: all the various statistics.
It is also this whole set of elements which are used by bookmakers and sport traders to calculate their odds. Thus, in summary, detecting a value bet amounts to thinking that we better estimate the chances of victory or defeat than the bookmaker... hence the expression "beat the bookmaker" when you win your gain.
We do not forget then that, as in any game of chance, "winning" does not mean winning ONCE, but winning in the long term, on a large number of bets: a good poker player is not the one who wins a hand, or even a game, but many tournaments ...

Pit bookmakers against each other

A more practical answer anyway, some line of research:
Bookmakers are pros at probability and statistics. This is their job, and teams of forecasters, statisticians, traders, and other data analysts work specifically to calculate probabilities and provide the corresponding odds.
How to beat a pro ? by asking to another pro... In summary, you should not hesitate to use the services of several bookmakers, to compare the odds offered between them. Even if bookmakers also adjust their odds by observing those of their competitors, by observing patiently and fluently, we can find "raw" odds, which are different between bookmakers, and which clearly show the probability calculated by the bookmaker, before being adjusted and smoothed with the others.
These not yet adjusted odds are then closer to the actual statistical odds , and we can act accordingly if we see it evolving upwards or downwards.

An example of a method that explicitly exploits this competition is the 2 of 3 system: bookmaker variant.

How much to bet ?

Even a clearly identified value bet bet remains risky: even if the odds of an event outcome, offered by my bookmaker, are 1.66, i.e. a probability of 1/1.66 = 60%, even though I estimate that my team can win with a probability of 80% so, even if my estimate is relevant and accurate, we must not forget that I still have a 20% chance of losing !
A value-bet is not a sure-bet ! it is a winning strategy not systematically but in the long term.
So, even in the case of a clearly identified value bet, it would be very awkward to bet your entire bankroll. But how much to bet then ? knowing that the higher the probability and the odds, the more it seems wise to bet high stakes, according to my abilities of course, and vice versa for a lower probability of winning and a lower odds.

The answers the question, giving a mathematical formula from which stake to bet can be determined.

See also: