Hey everyone, this is Sam. Some of my Daily Sports Betting Overtime podcast listeners ask me the question at least once a month…why don’t you bet +money bets every time? I think we need to explore what is expected value. This is a continuation of my thoughts on different parts of sports betting.
Expected value, or EV for short, might just be the easiest way for new bettors to find great value bets. Meaning bets they can make money on consistently. While all those other words and terms are important to know and understand, a bettor can survive with a great understanding of EV.
So what is the expected value in sports betting? It is the measure of what a bettor can expect to win or lose on each bet placed on the same odds. A positive expected value (+EV) implies profit over time, while a negative value (-EV) implies a loss over time. Obviously, the higher the EV goes, the better value of the bet. Yeah, I understand that many of you are going “huh?” Well, let’s talk about real-world situations or bets.
Examples of Sports Betting
The most basic example of expected value is the simple coin flip that most of us have done at one time or another. Let’s say that someone is willing to pay a bettor an $11 return for a $10 bet on either heads or tails.
For each bet, the EV would be .5. Each time the bettor wagered $10, he or she could expect to win $0.50. This makes the bet a +EV bet. When done enough to remove luck from the equation, the bettor should profit over time.
Expected value is easiest to understand when broken down into three parts, why it is important, how it’s calculated, and how bettors can find positive EV bets.
Why Expected Value Matters
New sports bettors often think that they should bet on “winners.” They look at a game, come up with who they think will win or cover the spread, and bet accordingly. These amateur sports bettors become completely taken aback when they are told this is not the way to profitably bet. They are really thrown off their rockers when they hear that sometimes, teams they actually think might lose (or not cover the spread) are the better teams to put a wager on.
Why? It’s because not many people can simply guess the winners of games of spreads with such high accuracy that it’s profitable. In fact, that’s exactly how sportsbooks make most of their money or as some say that’s what Vegas was built on.
Amateur bettors think they can outsmart the system with their litany of “sports knowledge.” If this was the case, anyone who watched enough sports could be rich. Believe me, I thought this on my first trip to Vegas. I thought I’ll move here and bet on sports to become a millionaire. Needless to say, I don’t live there or have a million dollars.
Unpredictably in Sports Betting
Sports are unpredictable, but expected value isn’t. Put it this way. The argument can be made that someone who understands and can use EV, but has very little sports knowledge, will profit more from betting on sports than someone who has an encyclopedia of sports knowledge, but does not understand EV at all.
Again, this is true because the expected value does not take anything into account besides the numbers. It tells a bettor the value of a potential wager, plain and simple. If a bet has a +EV, it could be a good value. If a bet has a -EV, it could be a poor value. Furthermore, the expected value can help new bettors sift through things they already know. EV matters, and new bettors who use it and pay attention to it give themselves a much higher chance to succeed.
Whoa, whoa, whoa, you mean to tell me you didn’t pay attention to the expected value in high school math class? And you don’t remember the simple formula for it? Wow… how disappointing. LOL Yeah, me either.
All jokes aside, calculating the expected value for a sports bet doesn’t take much effort. Multiply the probability of winning with the amount that could be won per bet, and subtract the probability of losing with the amount that could be lost per bet. The formula looks like this:
(Probability of winning) x (Amount won per bet) – (Probability of Losing) x (Amount lost per bet)
The best part about this simple formula is that nowadays, the internet will do some of the work. Head to an online sportsbook and find the decimal numbers for the amount won per bet. Plug the numbers in, use a calculator to figure the equation out, and boom. Calculating EV is simple enough it becomes a secondhand element of sports betting.
Finding Value Sports Betting
None of this matters if the bettor can’t find +EV bets. Finally, this is where a little bit of common sense and sports knowledge comes in. In fact, most everyone who is reading this article probably does a little bit of value finding already.
Basically, finding value bets means looking for opportunities where sportsbooks are offering higher odds than should be expected in any market or on any sport. So, spot an area where it looks like oddsmakers may be a little off, calculate the EV, and check how great of a value a wager truly would be.
There are a few things for a bettor to keep in mind when looking for value bets.
A +EV bet does not always mean the wager will win money.
The bet still has to win! EV just shows whether or not the bet is a good value. Again, EV works as a fantastic tool, but a +EV bet on an underdog will not always win.
A -EV bet isn’t going to lose every time.
Sports betting is a guessing game. Even though a wager might not be expected to net a profit more times than not, that’s far from a guarantee when doing it once. Sometimes, a wager on a heavy favorite will turn out to be a -EV bet. The -EV means the bet is a bad value, not that the heavy favorite will necessarily lose.
Low odds can still offer value.
Just because odds are low does not mean there will not be a +EV bet. All it means is that a bettor isn’t going to get rich off of the bet. If a bet is +130 but calculations say that it should probably be a little closer to +120 or +125 value is still there to be had!
If a bettor outsmarts the bookmaker, money can be won.
This is basically what sports betting boils down to. Outsmart the bookmaker and the bettor can net a profit. Expected value is a great piece of information to help do so.
Do you already do this before betting? Had you even heard of this style of betting? Let me know at @OvertimeDaily on Twitter or you can write to me at DailySportsBettingOT@gmail.com. I’ll be writing to you soon and hopefully, I’ll see you down the road soon.