What is value betting? A comprehensive guide

Value betting is a strategy which has been gaining popularity among punters. It’s an approach that has provided individuals with an opportunity to maximise the profit they may be able to obtain from winning bets.

This particular approach requires bettors to look at the probability of events and the odds that have been set by bookmakers. There can be discrepancies where the prices set do not reflect the perceived chance of something happening, thus creating value for the bettor.

In this article, the strategic approach of value betting will be discussed, and everything related to it will be analysed. I will also provide useful strategies, hints, and tips, as well as pinpoint some challenges and misconceptions that may arise for those who are not as experienced as others when it comes to using this approach.

What is Value Betting?

Value betting is where bettors look to try and find a perceived value in the odds that bookmakers have made. They do this by looking at those odds closely and then examining what they believe the true probability of an outcome is. For example, bookmakers can price a market with lower odds than what you believe is likely, such as a predicted result, creating an edge.

A value bet will exist when the implied probability from the odds setter is lower than the probability that the bettor has assessed whether using various tools or their own understanding through experience.

Read: Best UK bookmakers

Key Concept of Value Betting

A key concept of value betting is looking at the expected value a bet can return. Known as EV, it represents the average amount a punter could expect to see returned if they win or lose per bet when placed repeatedly. The following formula is:

• EV = (Probability of Winning × Potential Profit) - (Probability of Losing × Stake)

When looking at the expected outcome, a positive or a negative value will be provided.

• A positive expected value will suggest it is a value bet, as the return believed to happen outweighs the risk.
• A negative expected value is the exact opposite, suggesting that the bet will likely result in a loss over a period of time when continually placed.

What could an example of an expected value bet look like?

• A bookmaker provides odds on a market of 2.50 for a team to win. This implies they give them a 40% chance of winning.
• A bettor may think the odds of that happening are greater, perhaps giving it a 50-50 chance (odds of 2.00).
• As there is a discrepancy between the two, it could represent a value bet as the bookmaker has been perceived to undervalue the chances of a positive outcome.

How to Identify Value Bets

Identifying value bets can be something that most punters can do with a little practice. Understanding how to do so can greatly improve any chance that specific bets can be found, although some key skills are also required.

Punters should be able to analyse the odds that have been provided by bookies and make their own non-biased judgements, using research and even specialised tools, to help them.

Assessing True Probabilities

Before trying to find a perceived value in a bet, bettors must estimate the true probability of an outcome. To do this, a few approaches should be considered:

• Statistical Analysis: Use historical data, team or player performance metrics, and other relevant factors (e.g., injuries, weather, or home advantage).
• Intuition and Expertise: Experienced bettors may rely on their knowledge of a sport, but this should be backed by data to avoid bias.
• Models: Predictive models have been made available that can estimate the probabilities of certain events happening. These can be a useful way of taking the guesswork out, especially for beginners.

Understanding Implied Probability

Bookmakers have no sure-fire way of knowing what will happen in an event. They can use many statistical models, mathematics, algorithms, and more to try and estimate what happens. This means the odds they set are based on an implied probability.

When they set their prices, they also include their margin for profit. This is something else that bettors should remain aware of. So, when calculating implied probability, keep the following formula in mind:

• Implied Probability = 1 / Decimal Odds

Using the same example above, odds of 2.50 imply a 40% chance of winning (1 ÷ 2.50 = 0.40). A bettor will then need to compare this to their estimated probability to see if there are any discrepancies, allowing them to potentially find value.

Calculate the Value

To find out if there are any differences between the implied and estimated probabilities, bettors should use the following formula:

• Value = (Your Probability × Bookmaker’s Odds) - 1

If the result of the equation is positive, then it can be considered a bet with value. It is perhaps easier to understand it when the bet is between two outcomes, as the real probability would be 50%, however implied probability may offer odds that are slightly in favour of one result.

For instance, the real probability for an event is 50% (0.50). The bookmaker has set odds of 2.50 (suggesting a 40% chance). To determine the value using the formula above, a bettor would do the following sum:

• Value = (0.50 × 2.50) - 1 = 1.25 - 1 = 0.25 (25% value)

Shopping Around

Not all bookmakers will offer the same odds for identical markets. There can be slight differences, allowing greater value to be found when shopping around. With websites providing odd comparisons, it can be easier and quicker than ever to compare and find the odds where more value can be obtained.

Read: Sports betting odds explained

Is Value Betting Profitable?

Value betting can be profitable when done correctly. However, it should never be seen as a money-making strategy. Remember, there are never any guarantees when betting.

To try and make it as profitable as possible over a period of time, the approach must be followed as strictly as possible, while also ensuring that no other methods are used. It isn’t risk-free, as losing bets can still happen regularly. They must be factored into long-term planning.

Does Value Betting Work?

Value betting can still work, provided bettors stick to the aspects that make the approach work. If real value can be identified accurately, individuals will have a better chance of identifying the bets that have value. If they don’t, risk will follow. A false value is arguably the biggest risk.

As noted, it’s important to recognise that value bets will not always win. They may not even provide profit over a period of time. However, if value can be identified regularly, long-term profits could be obtained as bettors will understand where the edge is and where they can potentially exploit it.

Pros & Cons of Value Betting

Several pros and cons exist regarding value betting.

While the risk associated with this approach can be considered one of the biggest negatives, it’s also possible to balance that with the potential for long-term profit. In addition, many other elements should be considered before determining whether it is the right strategy.

Listed below are just some of the main pros and cons of value betting:

Watch: Sports betting myths debunked

Strategies to Maximise Value Betting

To maximise the potential success of value betting, bettors should consider implementing certain strategies to give them the best possible chance of returns. Remember, there are no guarantees that a return can be made all the time, but the following strategies can make a difference when used correctly.

Bankroll Management

As with all forms of betting, using proper bankroll management strategies is crucial. It’s one of the most important things that can be done to create a positive experience. With value betting being a long-term strategy, losses will naturally occur, so it can be best to try and keep to an approach that involves fixed betting stakes.

This strategy sees bettors continue to wager with a consistent percentage of their bankroll or a set amount. This will allow for the risk to be minimised as much as possible.

Wagering on Niche Markets

While it is important in betting to be as knowledgeable about the markets being bet on to maximise success, a popular strategy has been to wager on niche markets within the sports that a bettor is an expert in.

Bookmakers can be less accurate with their pricing on these markets, which can create additional value. Becoming knowledgeable and an expert on these can help maximise success over a long-term period.

Tracking your Bets

Keeping track of the bets placed can be a strategy worth following. By keeping detailed records, a bettor can make better decisions, which could lead to profitable outcomes.

Bet tracking will require discipline and organisational skills, but it can allow individuals to look back on what they did in the past, whether something worked or didn’t, and whether their probability estimates are accurate or need adjusting.

Avoid Emotional Betting

Sports betting can be an emotional activity. Many will bet on their favourite teams or athletes because they support them, even when the most likely outcome isn’t in their favour.

When engaging in value betting, it’s important to stop emotions from setting in. Bettors must stick to the system and not be drawn in because they think an outcome has a better chance than it does.

Challenges of Value Betting

As noted in the ‘Pros & Cons’ section, some challenges can be encountered when engaging in a value-betting strategy. The following are the most notable instances that may be observed:

• Variance: Value bets can lose, with losing streaks possible. Patience is needed, while a sufficient bankroll is needed to weather any storm.
• Restrictions: Some bookmakers may limit or ban bettors from using their accounts if they are found to be winning consistently using value betting. Using multiple sites and avoiding detection through obvious patterns can reduce the likelihood of this happening.
• Time & Effort: Value betting requires time and patience. It also requires significant research and analysis, making it a time-consuming task that requires dedication and effort.
• Accurate Probabilities: Trying to accurately predict an expected outcome's real probability is a challenge. Bettors who misjudge this frequently will see their strategies underperform. 

Read: Understanding variance in betting

Misconceptions of Value Betting

Along with the potential negatives that might be experienced, there are some misconceptions about value betting. These may include:

• Higher Odds = Better Value: High odds don’t always indicate value; they may reflect low probability. Always compare to your estimated probability.
• Value Betting Guarantees Wins: Even value bets can lose. Bettors should remember that the goal is to win more than they lose over time with this approach. There is no way a winning outcome can be obtained every time.
• It’s Easy: Value betting is far from “easy”. While it can be made “easier” once understood, it requires a lot of dedication, patience, and effort. Even then, there is no sure-fire way that a positive result will happen.

What Tips Can Beginners Use?

Beginners to a value betting approach should consider the following:

• Start Small: Begin with low stakes to test strategy.
• Learn the Sport: Deep knowledge of a sport improves the ability to estimate probabilities accurately.
• Use Free Resources: Use free statistical websites and odds comparison tools before investing in paid software.
• Be Patient: Value betting is about long-term gains, not instant wins.
• Stay Updated: Follow sports news to account for last-minute changes (e.g., injuries or lineup changes) that affect probabilities.

Conclusion

Value betting can be a profitable approach for those who use it successfully. It can identify the value that odds have, and whether they have been set accurately, giving them an edge over the bookmakers. However, it requires a deep understanding of probabilities and specific strategies to make it as effective as possible.

It’s not a guaranteed method of scoring returns, as losses can still happen. Discipline is key, as is patience and effort. Still, if used correctly, it can transform any betting experience and maximise profit over a sustained period of time.