Often times we hear that betting enthusiasts and prediction analysis experts use Value betting to maximize their chances of success, but do we really know what it is? Let’s break up the two terms so we can get an idea of what it’s about. Value is a term used for investing; the higher the value of an idea or object, the safer the investment. Therefore, the most basic definition of value betting is finding out the value of bets, comparing it to the present odds and investing money on the highest value bet.
How is Value Betting used?
Value betting is used by betting experts to help them place bets which have a higher value than the odds being offered by the bookmaker. Finding out the value of the bet is a complicated task as it involves several variables, but once the probability of an event happening is found, it can be compared to the bookmaker’s odds using a simple mathematical formula and then be used to place a safe bet.
Still doesn’t make sense? Let’s look at an example in order to understand this concept better. Suppose there is a soccer match going on between two fictional teams, A and B. According to your own estimates, the odds of team A winning at 52% while the odds of team B winning are 48%. Remember that to find the odds of an event happening, you have to divide the probability of it occurring by 1. The lower the odds, the more the chance of the event occurring. So the odds are set at 1.92 for team A and 2.08 for team B.
The next step would be to find a bookmaker that offers odds which are higher than your estimated odds. In laymen terms, he is willing to take bets on an event not happening, which according to your estimates has a higher chance of happening than his estimates. So supposing a bookmaker offers odds of team A winning at 2.12, you placed a value bet on that chance, as you are getting lower odds according to your estimates than the bookmaker, and are more likely to succeed.
The profit margin resulting by placing the bet on those odds is found by dividing the bookmaker’s odds with your own. As in the above example, 2.12/1.98 gives you a profit margin of 1.07, which when expressed as a percentage would be 10.7%.
Though it may seem very simple in the example, value betting can prove to be a complicated technique. As we all know, the bookmaker doesn’t make estimations just based on gut feelings. Rather, he uses his own estimations and complex numbers and patterns to come up with his estimations so he doesn’t go into a loss. A betting expert planning to derive the value of a bet should have plenty of information of the variables that might affect the outcome. This can be achieved by crunching in the numbers personally while taking the various factors into account, or by hiring a predictive service or a tipster to save you the hassle.