What is value betting?

What is Value Betting? – How to Beat the Bookmakers

The key to being profitable in your sports betting is ensuring your bets are consistently offering ‘value’.

This article will explain the concept of value betting and how you can generate some ideas to create your own value bets.

The difference between profitable sports bettors and the rest

The main difference between successful sports bettors and most of the betting public is that the bets that successful bettors choose will show value in the market. In very simple terms, their bets have a higher probability of winning than the bookmaker odds suggest.

The idea itself is very simple and many casual bettors might believe they are betting on value, but in fact are doing the very opposite. Let’s look at an example of two conversations in the local bookies and tell me which punter is more likely to make a profit at the end of the year.

"City are going to win this game. Doesn’t matter what the odds are, it’s a banker. They’ve not lost at home all season and they’ll be well up for this."
"Forest’s price against City is too big. City have De Bruyne, Haaland and Rodri out and struggled to break down teams at this end of the table. City have had 3 games in 10 days as well and Forest have had a bit of a break. The weather is also grim tonight and it’s going to be pouring down with rain which is going to affect the city tiki-taka. Forest are 7/1 at the moment but I’d make them closer to 5/1"

It’s more likely that the punter who backs City every week will end up at a loss at the end of the season than the one who carefully chooses games where the underdog is being underestimated.

The thought process in the first example is also fairly shallow, and this has already been priced into the market. Whereas, you could argue that most bookmakers won’t have priced in all the extenuating factors and variables in the second example.

In the second example, the punter has a price in mind that they think it should be. This is crucial to the process of value betting. It is not about picking winners. It is about picking out games and markets where the odds are ‘wrong’. 

You might be thinking, why would you carry out a strategy where you’re not actively picking out winners? It’s a question of mathematics.

Man City might be likely to win their game, but if you keep betting on them when they are only 75% likely to win their game but the odds suggest they are 80% likely, then you will end up losing money long-term.

Beating the bookmaker margin

Let’s take a simple example of a tennis match, which will show you how the bookmaker tries to swindle you in plain sight by offering you poor value.

To Win Match

Header

Barbora Krejcikova

1.90

Liudmila Samsonova

1.90

The above example is a tennis match between Barbora Krejcikova and Liudmila Samsonova.

What does the pricing of this match tell you about the bookmaker’s thoughts on the game? Both are offered at the same odds, so presumably they should both have a 50% chance of winning the game. However, if this were the case, then both players should surely be offered odds of 2.00 (evens).

How would we calculate this?

We simply divide: 1 / 0.5

The 0.5 is equivalent to the 50% probability we think each player should have in this example.

1 / 0.5 gives us a value of 2.00, which would be the fair odds. Instead the bookmaker has offered us odds of 1.90.

If we flip the above formula around and divide: 1 / 1.9 we get a percentage value of 52.6%.

Let’s think about this for a moment. If we add the percentage values of those two players together, we get a percentage of 105.2%

How can a game with two players have both players with more than a 50% chance of winning?

Well, the answer is that neither has more than a 50% chance, but the bookmaker adds margin to the betting market.

Their business model is designed for a high volume of gamblers to choose bets that offer poor ‘value’ and they will make a small percentage over the course of thousands of bets.

Imagine I were to offer you odds of 1.90 on one team winning a cricket toss or a heads-or-tails bet. You wouldn’t take that, would you?!

The concept of bookmaker margin is very important because simply betting on prices where the bookmaker odds are wrong is not enough. You need to be able to beat the bookmaker margin as well to create expected value.

So in very simple terms, if we take the tennis example, we need to be confident that the bookmaker price is at least 5.26% ‘off’ for us to break even if we did this multiple times.

We would probably need to be confident that one of the players fair odds are actually 1.80 or less to potentially have a bet and have a good chance of profiting.

Examples of value betting strategies

1) Steam chasing

One example of value betting that’s been proven long-term is "steam chasing" Pinnacle prices.

Pinnacle is renowned as one of the sharpest bookmakers in the world and the bookmaker that most bookmakers in the UK will look to if they think their prices are wrong.

The issue for the UK bookies is that they are often very slow to adjust their prices to what is going on at Pinnacle and other so-called Asian bookmakers.

A great way to exploit this is to take prices that are moving at Pinnacle at UK bookmakers before they adjust them.

A clever piece of software called Trademate uses this core strategy to alert users to bets like these. Here is a graph showing my results using this strategy with the software:

Value betting graph

You can see three lines in the graph: the blue line is the profits, the green line is the closing EV (the price of the market at the time of the game starting), and purple is the EV taken at the time of the bet. 

What it shows you over a sample of over 20,000 bets is that the lines will not always follow the same trajectory, but the more you take the expected value, the more likely you are to be profitable long-term.

In my example, I got lucky initially and hit a great run, which came back to bite me later with a big drop in profits. However, if the number of trades gets into the hundreds of thousands or even the millions, you’ll see the graphs converge closer together.

2) Team news

During the peak of COVID, there were huge market movements on teams with players potentially missing.

Getting ahead of the bookmakers and getting this information fast led to some huge profit-making potential, with odds on teams moving significantly. 

Take this fictional example above; if you were to have backed Arsenal early enough, you would have had huge value on them by the time of kick-off, even after calculating the bookmaker margin.

3) Ante-post bets

If you’re a keen racing fan, you may have spotted a horse with lots of potential and then decided to back them on an antepost market for the Cheltenham festival next year.

At the moment, you can get 50/1 on that horse on an each way bet. Fast forward to the day of the race in Cheltenham, and all the racing pundits and public fancy this horse as a great outside bet.

Its price has caved in to 16/1, and you’ve just got yourself a great value bet.

4) Penalty takers

A key penalty taker for a team is ruled out injured in the warm-up; you’ve spotted this and know who their backup penalty taker is.

You’ve thought quickly and bet on that player on the anytime goalscorer market because you notice the price hasn’t changed yet.

That player is being offered at 10/1. At the time of kick-off, their price had moved to 5/1. Another great value bet.

Conclusion

  • Value bets have a higher probability of winning than the bookmaker's odds suggest.
  • Value betting is about picking out selections that are wrongly priced in your favour and still show value after taking the bookmaker margin into consideration. It is NOT about picking winners at any price.
  • You can still have bad runs betting at value, but over a long period of time, you will be profitable betting at value prices if you are disciplined with your staking.
  • Value bets can be found in many ways, such as in the examples given. E.g., early bets, comparing prices that are slow to move at bookmakers, comparing to Pinnacle pricing, and using your own knowledge of certain sports, teams, and information that might affect the price

We hope this article has given you a good understanding of the idea behind value betting and why it is so successful for professional sports bettors and anyone wanting to take their betting to the next level and increase their profitability.

This is part of a series of articles that will give you the confidence to place smarter, more profitable bets and bet the markets like the pros do!


Author: Neel Shah

Neel Shah

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