Benefits of Valuebetting
To be a winning punter in the long term, you must place value bets almost exclusively. "Value bet" or "Value" is a crucial notion as it forces the punter to think about his or her bets. One of the biggest mistakes made by novice punters is to bet on a hunch, without any real analysis. Trying to determine whether a bet is a Value bet or not obliges the punter to mathematically estimate the chances of success for the event.
Definition of a Valuebet
A bet is a Value bet if the probability of success is greater than the profitability of the bet.
Let’s take a simple and well-known example: the game of Heads or Tails. In an honest game of Heads or Tails, you have a 50% chance of getting Heads and a 50% chance of getting Tails. A 50% probability of success is equal to odds of 2. Now, let’s say that the bookmaker Bwin is offering odds of 2.5 on Tails.
(50% X 2.5) / 100 = 1.25
The Value Bet formula is [(Prob X Odds)/100]. If this result is greater than 1, we are dealing with a valuebet. The higher the result over 1, the more profitable the valuebet.
In the example mentioned above, we thus have a Valuebet index of 1.25, meaning that this bet is profitable and should be placed. Wagering on a valuebet does not mean that your bet will automatically win. It just means that you’ll come out on top in the long term.
Benefitting from Value bets
Let’s say that you wagered £10 on 5,000 Tails type sports bets at 2.5. According to the probabilities, you’ll thus have 2,500 winning bets and 2,500 losing bets.
- You win: (£10 X 2,500 X 2.5) - (10 X £2,500) = £37,500 of net profit
- You lose: £10 X 2,500 = £25,000 of losses
- Total: + £12,500
Identifying Value bets
The big problem is in finding odds of 2.5 on a bet with a 50% chance of succeeding. Realising that bookmakers take a margin and that they know the sport, you must therefore be better than them on certain sports bets. This forces you to be disciplined and not to bet indiscriminately on anything.
Focusing on value bets forces you to adopt the behaviour of a winning punter by:
- Staking less than 5% per bet to withstand losing runs (variance) and "stay alive" in the long run
- Analysing each bet to outwit the bookmaker
- Not betting on anything that takes your fancy because only a few bets per day are "value"
- Not seeking to make up for your losses immediately because you know that you’ll come out on top in the long term
Needless to say, it’s a tricky exercise but one that can prove to be very profitable.