Value is something you’ll hear most people who look at betting markets talk about, but what is it? When I am looking for value I take into account the below three factors. For me to place my money on a outcome the bet must fit into one of these categories.
1. Are the odds, once converted into a percentage, larger than the actual percentage chance of the outcome?
The probability of a coin landing on heads or tails is 50%, there are only two possible outcomes.
Therefore 100/2 = 50
50 is the actual percentage chance of the outcome, meaning the odds of either outcome should be Evens (2.00).
So if I was offered 11/10 (2.10) on heads I would take the bet as the odds offered are saying that heads has 47.61% chance of landing, therefore giving me an advantage of +2.39%. This advantage should mean that over a period of time I would make a profit.
2. Are the odds on offer are out of line?
There are ten bookmakers; nine of them are offering 6/1 about a horse whilst one is offering 12/1.
Some people may not agree with this example but I believe that the 12/1 in the above example is value due to the way a market moves. Markets are moved by money and bookmakers balance their books accordingly. If one bookmaker is going 12/1 about a general 6/1 shot, he either knows something or he’s offering value because he’s got his sums wrong. It’s more likely one person is going to be wrong than nine.
He may get lucky and the horse doesn’t win but over the course of time he will lose his money being that far out of line. At 6/1the horse is given a 14.28% chance of winning, the 12/1 gives it a 7.69% chance. Therefore the theoretical value that you are getting on the 12/1 is +6.59%.
3. Is the theoretical chance you give an outcome greater than the odds offered?
Whilst the above examples do happen they are unlikely to be regular occurrences. The most likely way you’re going to find value is by give your selections a percentage chance of winning, converting that percentage into to odds and seeing what prices are on offer in the market.
You believe that Crystal Palace have a 56% chance of beating Barnsley when playing at Selhurst Park.
100/56 = 1.78
1.78 (roughly 4/5) are the odds you believe that Crystal Palace should be.
The bookmakers are pricing them up at 1.91 (10/11), therefore they are giving them a theoretical 52.35% chance of winning. This example gives you a +3.65% theoretical value.
Why is this important?
Well to make a profit from betting it’s not just about how many winners you get it’s a about being able to cover your losses too. There will always be losers! There is no point having 98 straight winning bets at 1.01 (1/100) if your 99th bet loses and wipes out all your profits.
If the average theoretical percentage you are getting works out at say +3% for example then over 100 bets you should make a profit.
A good way to know if you are on the path to finding value is to look at the odds you are backing at and the starting price. If you are continually backing horses the night before or early in the morning and they are starting shorter then you are on the right track. The reason that you are on the right track is because the theoretical belief is that the market at the time of the off is ‘correct’. The reasons that the market should be correct at the start of an event is due to the money going into it. This should adjust the prices to their actual theoretical chance.
If you find value then the winners should take care of themselves.