The terms probability, expectation, likelihood, chance and hit rate are all closely related, and express more or less the same thing. The difference is that before a game one talks about ‘chance’, ‘probability’, ‘likelihood’ and ‘expectation’ but, after it has finished, these terms are replaced by ‘hit rate’.
However, although often referred to, the term value has no place in this relationship. The literal meaning of ‘value’ is benefit, merit, worth and price.
Unfortunately, the latter meaning is probably the main reason why people find the expression ‘value’ rather confusing. Betting odds offered by bookmakers or exchanges are the market’s expectations (probabilities) converted into the price of a bet.
However, if the ‘value’ of a bet is discussed, this refers not to the actual price (odds) of the bet but to the merit or benefit of a particular price.
Strictly speaking, it would be more correct, instead of using the term ‘value’ to say “mathematical advantage” or “expected merit“, but these phrases are not usually connected with the mindset of football bettors.
Probability & Expectation
To give you an example, in the 2012 UEFA Champions League final between Bayern Munich and Chelsea the probability (statistical expectation) for Bayern to win was 64.6% (the calculation is explained here – Sorry! You’ll have to auto-translate it if you don’t understand German! 🙂).
Please note that the terms probability, likelihood, chance and expectation are frequently used synonymously in scripts.
Technically speaking this is not entirely correct and real mathematicians probably groan indefatigably when they read betting forums or posts.
However, for simplicity, this is allowed and even we use these terms arbitrarily in some of our articles and explanations, but we mean all the time the same thing: The expected hit rate!
An expectation, probability, likelihood (call it what you will!) of 64.6% for Bayern to win means that in the long-run, placing 100 similar bets should see 65 winning and 35 losing.
Reality Check: Hit Rate
Hit rate has no connection with the quality of predictions.
High hit rates are often interpreted as a sign of a successful picking strategy. Unfortunately, this is a big and very common misconception! The only thing hit rate expresses is the number of winning bets compared with all bets. Hit rate is not a statement of any realised gains or losses.
Hit Rate is the number of winning bets in relation to all placed bets.
For example, if you bet on the full-time correct scores market, odds of 10 and over are normal. Based on such odds, any hit rate higher than 10% means profit, which in turn means if you manage to predict full-time scores with an accuracy of more than 1 correct in every 10 attempts, you will make a profit (despite a relatively small hit rate).
More examples… if you bet only on outcomes with probabilities between 60 and 70%, then the expected hit rate is between 60 and 70%. It follows that after 100 bets you should achieve 60 to 70 winning bets.
If you want to achieve a hit rate of over 80%, you must only bet on probabilities of 80% and above. These are back bets with odds below 1.25 and lays above 5.0.
If you prefer betting on odds between 1.8 and 2.2, a hit rate of around 50% can be expected and if you can achieve a hit rate of over 55% in this bracket, profit will be made.
At these odds if you expect to achieve an 80% hit rate from your own strategy or gut-feeling, or rely on a picking service to deliver, then you will be sorely disappointed as it is unrealistic.
A further example: If your strategy is to lay correct scores at odds between 7 and 12, then a hit rate of around 90% is realistic.