Value betting is a phrase used to describe an approach to gambling for long term profit. Although this term is widely employed in the sports betting world, unfortunately neither ‘value’ nor ‘value betting’ are anywhere clearly defined, which naturally leads to misunderstanding and confusion.
When people talk about ‘value’ in connection with betting there are many different schools of thought.
This article therefore attempts to shed some light on this complex concept and its terminology…
Firstly, let us begin with a few synonyms for the word ‘value’: worth; usefulness; advantage; benefit; gain; profit; amount; rate; price…
You can see straight away that there is a plethora of different connotations.
The last two meanings in particular, ‘rate’ and ‘price’, are probably the reason why the expression ‘value’, when used in the context of ‘value betting’ is often unclear.
So, what is Value in relation to Sports Betting?
In order to really understand the concept of ‘value betting’, you need to grasp several connected aspects and I will tackle each of these individually for better comprehension.
Tip: Grab yourself a caffeine shot and read every section (re-read if necessary) until you are comfortable enough to proceed to the next. What I am about to say may initially be hard for some to digest, but don’t worry, you will certainly not be alone. Headache pills may be advisable for some… 😉
(1) Betting Odds are solely the Market Prices for Bets
Anyone interested in sports betting knows that bookmakers offer bets on a multitude of match outcomes and sometimes the list of available bets on a single event can appear endless.
For example, the 1×2 market allows you to bet on a home win, a draw, or an away win, either at half- or full-time. Will there be more than two goals in the match or not (over or under 2.5 goals), will both teams score, or will the match end goal-less? Et cetera, et cetera…
Only very few bettors fully comprehend and understand the fact that betting odds are nothing more than the market prices of bets.
Betting Odds are Prices that Few Understand
Betting odds are not only all-inclusive prices for bets but to add to the confusion they are displayed, not in simple and easy understandable monetary units, but in different formats such as decimals, fractions, or moneyline.
When buying a bottle of beer, for example, you pay one Euro, Pound or Dollar and walk home with your purchase. When buying a bet, say, at decimal odds of 1.27 (27/100 Fractional Odds; -370 U.S. Money Line), the only thing you may understand is that if the bet wins you will receive your stake money back plus 27% winnings. Of course, if the bet loses all of the stake money is forfeited.
Judging ‘value for money’ from a bottle of beer is far easier than evaluating the same in a bet. Many bettors struggle to calculate the expected return of a bet or a series of bets let alone analyse why the big win they hoped for failed to materialise.
Even if sports betting odds appear to be genuine offers, the fact is that odds are frequently distorted.
Betting Odds cannot be priced by Gut Feeling or Intuition
Very few people are born with a sense of probabilities and ratios. Statistics and financial education are rarely taught in high school and touched upon in very few university courses.
To develop a ‘feeling for price’ is impossible, even for those of us who are born with a sense of probabilities.
To make matters worse, every bet is actually a different product, even if betting on just one particular type, for example, the “over 1.5 goals” market. Think about this bet in the context of a match between two evenly matched teams as opposed to, say, the team at the top of the table playing the weakest team in the league. The name of the bet is still the same but the two match situations are totally different.
There is no way but applying maths and statistics to decide whether the price of any bet offered is “too expensive” or “too cheap”. Gut feeling is misleading and may prove fatal. Probabilities are a subject too complex to succeed with guesswork, feeling and intuition alone.
For those of you who are really serious about understanding sports betting in depth and developing a value betting strategy, there really is no alternative to learning the calculations necessary.
In order to grasp the concept of value it is of uttermost importance to comprehend that betting odds are merely prices, and not ‘true odds’.
Before I address the term ‘value’ I must first plunge into probabilities… please stay afloat!