To find the expected value (EV) in sports betting, use the formula: EV = (probability of winning x profit if you win) – (probability of losing x stake). This helps you assess whether a bet is worth placing based on the odds and your estimated chances of winning.
Understanding Expected Value in Sports Betting
- Definition: Expected value is a statistical measure that helps bettors determine the potential profitability of a bet over time. It reflects the average outcome of a bet if it were placed multiple times.
- Formula: The formula to calculate expected value is:$ EV = (Probability , of , Winning) \times (Profit , if , Win) – (Probability , of , Losing) \times (Stake) $
- Components:
- Probability of Winning: This is your estimated chance of winning the bet, expressed as a decimal (e.g., 50% = 0.5).
- Profit if Win: This is the amount you would win if your bet is successful.
- Probability of Losing: This is the chance of losing the bet, which can be calculated as .
- Stake: This is the amount of money you wager on the bet.
Example Calculation
- Scenario: Suppose you are betting on a coin toss where the true odds are 50/50, and the sportsbook offers +120 odds for tails.
- Values:
- Probability of Winning: 0.5 (50%)
- Profit if Win: 100)
- Probability of Losing: 0.5 (50%)
- Stake: $100
- Calculation:$ EV = (0.5 \times 120) – (0.5 \times 100) $$ EV = 60 – 50 = 10 $
- Interpretation: The expected value of this bet is $10, indicating a positive expected value opportunity, which suggests that over time, this bet is likely to be profitable.
Finding Positive Expected Value Bets
- Identifying +EV Bets: Look for situations where the odds offered by the sportsbook are more favorable than the true odds of the event occurring. This involves:
- Analyzing the true probability of an event.
- Comparing it with the odds provided by the sportsbook.
- Long-Term Strategy: Betting on events with positive expected value does not guarantee immediate success but increases the likelihood of profitability over a large number of bets.
Conclusion
Understanding and calculating expected value is crucial for making informed betting decisions. By consistently seeking out positive expected value opportunities, bettors can enhance their chances of long-term success in sports betting.