Prices, Numbers and Value

Understanding the numbers in the sports betting arena is absolutely key to becoming a profitable sports bettor. A failure to understand why a bet is worth betting will lead to a losing strategy, and no profit over the course of a few months or years.

Value
Value is subjective, and can be viewed simplistically or with a more complex approach, but ignoring the concept is a disaster waiting to happen. The vast majority of sports bettors bet using gut instinct and emotion, and is why 98% or punters never make any money, and why companies like Paddy Power are reporting record profits. People and companies invest time and money in trying to establish value in sports betting markets, sometimes at great expense. Being able to find value is almost invaluable, as long term, you can almost guarantee profit - if you can guarantee value.

Understanding Prices
This sounds basic, but so many punters aren't aware of what the prices they are given actually mean. An example of this came during a debate on twitter a few days ago, where we were told the "no ones gonna put a bet down on a 25% chance lol" after we pointed out that a 3/1 single is as likely to win as a double comprising of two even shots (both instances have odds that imply a 25% chance of success).

A useful thing to understand is what odds represent in terms of percentage chance of success. The easiest to work out is that an evens bet (odds of 2.00) suggests a 50% chance of winning. To work it out, simply divide 1 by the decimal odds then multiply by 100. With the examples of odds of 2.00, divide 1 by 2 to get 0.50. Multiply 0.50 x 100 to get 50 = 50% Here are a few other examples:

1/3 (1.33) = 75.0% chance
1/2 (1.50) = 66.6% chance
3/4 (1.75) = 57.1% chance
5/4 (2.25) = 44.4% chance
2/1 (3.00) = 33.3% chance
5/1 (6.00) = 16.7% chance

By understanding this, you're one step closer to being able to establish what constitutes a value bet.

Bookmaker Prices
The next, and biggest issue is finding value from the odds provided by a bookmaker. Obviously, bookies are 'for profit' businesses, so are looking to make as much money as possible from their customers. To do this, they add a margin on to their odds and balance their books to try and ensure a profit on each market, regardless of outcome.

What do we mean? Well, a quick look at an upcoming game on OddsPortal (we've looked at Arsenal v Sunderland in the Premier League) shows that any given bookmaker only pays out around 92-98% of money taken. This works by them adding what is known as an over-round. Football-Data.co.uk have written a good article about the overround.

The most basic example of this would be a fair coin flip. The odds should be 2.00 that it lands on heads (50%), and 2.00 that it lands on tails (50%). However, at the bookmaker, you would see them apply their overround/margin to provide prices of 1.91. This would suggest each instance has a 52.35% chance of success. The overround would be shown as 104.7%, meaning for every £100 staked, the bookmaker should make £4.70. Overcoming this is a key aspect of becoming a profitable sports bettor - but it is by no means easy, especially when bookmakers pay experts (and pay for expensive technology) to price their events as accurately as possible.

Accumulators
Having established that bookmakers are very often spot on with their pricing, finding bets that offer genuine value can be difficult. So when it comes to finding a good value accumulator with multiple bets, ensuring you've got good value becomes increasingly difficult. Each bet within an accumulator gives the bookmaker an advantage, and just as the odds multiply in an accumulator, so does the bookmaker's advantage.

Using the coin example once more. Imagine there are 5 people, each with a coin, and you bet an accumulator on predicting all 5 coin flips correctly. The price for each is 1.91, so getting all five right would pay at odds of 25.42. A £10 bet would return £244.20 profit, plus your £10 stake.

What should the true odds be? Well each choice you've made has a 50% chance of success, and 50% chances should be priced at 2.00. So 2 x 2 x 2 x 2 x 2 = 32.00. £10 should return £310.00 profit plus a £10 stake. The bookmaker has reduced the value of your 5-fold accumulator by £65.80 (21.2%).

The bookmaker odds imply your chance of success is 3.93% (1 in 25.4), but you realistically have just a 3.125% chance of predicting all 5 coin flips (1 in 32).