Sports Betting Guide
Expected value in football?
Football is the undisputedly all-time most popular betting market. Punters all over the world place thousands of bets on numerous football events. However, how much value is there in those bets? Let’s find out.
Finding value is your ultimate priority when it comes to betting (not only on football). There are numerous ways to gain the needed edge over the online bookmaker. However, none of them will prove to be efficient in the long run, if they do not provide any value. Remember betting is ONLY about value!
Every single bet you place must possess some value, otherwise, losses imply over time. Expected value, or EV, is a kind of measurement used to identify how much can we expect to win/lose placing the same bet over & over again. While EV can be both negative (long-term loss) & positive (long-term profit), the goal is to identify & secure the latter one in every single bet.
How to calculate EV?
Since value is so fundamental to betting, how can one calculate? The general Expected value equation looks the following way:
(Amount won per bet x probability of winning) - (Amount lost per bet x probability of losing)
The best way to demonstrate how does it work, & how to apply this formula to betting is using the coin toss. It is a perfect event to understand the EV better, since it has only two outcomes, and the chases of each one occurring are 50% (2.00 (1/1) in odds equivalent). Unfortunately, in such a case our expected value would be 0 for either outcome. This happens because the probability of either outcome is the same, thus, infinite tossing should end up in the results cancelling each other out (according to the big number theory).
In other words, betting the coin toss at true odds is simply senseless (considering you aim to make a profit). Add the bookmaker margin on top of that, and your expected value should immediately turn negative. However, let’s imagine a bookmaker that offers the odds of 2.15 (23/20) for both heads and tails. This is the example of a value bet (even though THE imaginary one). Your EV calculations for the particular bet should look the following way:
(11.50 X 0.5) - (10 X 0.5) = 0.75
According to this calculation, your average profit is supposed to be 0.75 betting units, assuming you continuously state 10 on the same coin toss wager.
Calculating EV via true odds
Generally, there are a couple of ways to calculate the expected value. Punters who specialise or focus on calculating the true odds of the event can use the other variant of the EV equation:
Expected Value = (Odds / True odds) - 1
Basically, it is the same formula, however, in that case, you need to find the true odds of the selected event/outcome prior to using it. Calculating the true odds is a separate topic, however, there is tons of information in our sports betting guide library on how you can calculate it in a couple of easy steps.
Assume an online bookmaker offers the odds of 1.90 (9/10) for an imaginary sports outcome, which has the true odds of 1.80 (4/5). In such a situation, your expected value is approximately 5%. How did we get that number & what it means? According to the above formula:
Expected Value = (1.90 / 1.80) - 1
The result of 0.0555556 can be rounded up to 0.05 or 0.06. We will take 0.05 for convenience purposes. Just like we mentioned above, a positive 0.05 EV means, we are going to make 0.05 units profit (5%) on the same wager in the long run. For simplicity purposes, a positive EV is when the true odds (calculated) are shorter than the ones offered by the bookmaker, and a negative EV is when they are longer. Remember, whenever your true odds are longer than bookmaker odds, your expected value always will be negative!
Professional & profitable punters are only betting with positive EV, which is greater than 0%. Interesting, but a negative EV does not always mean you are going to lose. Sporting events like football matches are extremely complex. There are hundreds of aspects that go into the probability calculations like fitness, weather, venue, part of the day, injuries, etc. The more of those you know the better estimation you can make. Estimating the true odds of any football event is entirely subjective. Thus, by having a more accurate estimation of the probabilities than the bookmaker or other punters on the exchange platform, you are more likely to make a profit.
Obviously, it is hard to calculate the true odds, but a good mix of various risk-assessment tools & betting models along with dedication and hard work will surely help you beat a bookie.
Keep in mind, beating the odds is not something that happens overnight. It is a hard & long process, which only shows its result after a while, so patience must be there if you want to make it work.
Expected value in football
Let’s take a look at how you can apply this method to gain the edge over the bookmaker on the football market. In order to make this model even more suitable for football, we have to readjust it once again the following way:
Expected Value = (Opening Odds / Closing Odds) - 1
As you can see, we are using the opening & closing market odds instead of the true & bookmaker ones. Considering the nature of both opening market & closing market prices, we can make the assumption that opening odds have a larger share of bookmaker mistake, while the closing market odds show us a market validated price, meaning it is much closer to the true odds (if not the closest it can get).
Thus, it would be safe to assume that the difference between the two is the actual expected value that the market initially had. Unfortunately, it is not always true that either type of odds is correct or incorrect. However, the difference between them can be used as a reasonable estimation of the potential market EV. Keep in mind, it is almost impossible to know the ACTUAL true odds in reality!
While using this new equation, you must keep an eye on a couple of factors:
- opening & closing market odds could be both shorter or longer than the true odds
- only one of them could be shorter and/or longer
Please, be aware of that when making your calculations. Nevertheless, the above method should give you a solid estimation of the amount of Expected Value possessed by the market.
Step-by-step tutorial on how to apply this method:
- collect historic market data (opening & closing odds)
- insert data in the last formula
- calculate EV for each case
Note, that will help you get the idea about how much EV there was in the past, as well as its average.
- analyse the results
- filter the positive EV results
- estimate the share of positive EV odds
- create a detailed statistical overview
- use it for your future bets
Spoiler Alert! The greater your EV will get, the smaller share of the odds will actually have it, decreasing exponentially.
Hopefully, this sports betting guide finds you useful & helps you achieve better results in the future. Make sure you test it before you use it. Do yourself a favour, and develop a habit of calculating the expected value for every bet you place & record it somewhere like a spreadsheet to help you build a good long-term betting model. Remember, it will take you quite some time before this method will start bringing the expected results. However, with a proper approach, it will come much sooner or later.