Expected Value Betting
Expected Value is a theory in which you will be in a good position to make bets at overestimated or underestimated bets in a long run.
Bookmakers use expected value against players. Our goal is to make a bet with a positive expected value. In other words, the odds were inclined to your side. If we make bets on betting odds, then we will have a negative mathematical expectation and you will lose money at a distance.
Negative Expected Value
When we make bets on betting odds, they are from the very beginning with a negative expected value. For example, take a coin, the chance of falling on heads or a tails of 50%. If you translate 50% into odds then we get 1 / 0.5 = 2.00.
When placing $ 100 per each side of coin, we will have the following EV:
- Heads: (100 x 0.5) – (100 x 0.5) = 0
- Tails: (100 x 0.5) – (100 x 0.5) = 0
In this case, we would not have won or lost at the distance.
Bookmakers in turn add margins, and for us, these bets become with negative EV.
For example, adding a margin of 2%, then:
- Heads: (92 x 0.5) – (100 x 0.5) = – $4
- Tails: (92 x 0.5) – (100 x 0.5) = – $4
So, at each bet made we will lose $4.
When placing 100 bets at $ 100 we will lose: 100 x 100 = 100 00 x 0.02 = – $200. Bookmakers are working like this.
Positive Expected Value
We need to make sure our probabilities are more accurate than bookmakers. For example: bookmaker set the odds on the victory of team A 1.9, and your probability is 55%, then when you bet the $ 100 on the victory of team A you will receive:
(90 x 0.55) – (100 x 0.45) = + $4.5
This means that at each such bet your EV is + $4.5
When placing 1000 such bets for $100 you will receive: 1000 x 4.5 = $4500 from $100 000 turnover.
It’s not so easy (wrote in the previous articles), that beating the bookmaker can be on the distance and from the turnover. The greater the advantage over the bookmaker, the greater the earnings and the less chance to go to the minus. In this example, an advantage over the bookmaker line is shown at 4.5%. In the real market this is a very big advantage, so focus on 1-3% earnings from your annual turnover.
To get greater betting profit, you need: calculate your own odds, use right bank management and this odds will be more accurately than bookmakers. Remember about long term betting – you can win only at distance. And there people ask this question: “How much I need to win that to get a profit?”.
Get answers at next article about “Win Rate”