Would you like to know the most crucial rule in sports betting that separates the novice masses from the pros? It’s the concept of placing bets based on value rather than solely attempting to predict winners.
This means that you must consider more than just what a team or athlete’s probability of winning is, you must examine that likelihood in relation to the odds being offered by the sportsbooks. Understanding and seeking out value is the only way to have financial success in sports betting in the long run.
Let’s say that after crunching all the data you’ve determined that the Houston Rockets have a 50% chance of defeating the Boston Celtics in an upcoming game. The bookmakers are anticipating the Celtics to win and set the Rockets’ odds at +200. Which team should you bet on in this situation?
The math says that the Rockets are the value bet in this situation. +200 odds carry an implied probability of winning of 33.3 percent. If your odds are higher than the implied probability, that bet has value.
Likewise, if the sports betting site sets a line that gives a team a 20% chance to win, but your analysis gives them a 24% probability of winning, it is actually a value bet. It may seem counterintuitive to bet on a team with only a 24% chance of winning, but over time the math will work out to profit. The increased earnings when the bet does win will offset the losses incurred the other 76% of the time.
Let’s look at one last example to break this approach down to its simplest form. Imagine that you are going to be betting on a coin toss. Since each side has a 50% chance of landing, you would expect the payout to be one-to-one. However, in this case, the bookie is offering heads for -300 and tails at +250.
You have to bet on tails! The implied probability of a +250 line is 28.57%, much lower than the real probability of 50%. On the other hand, no matter how strongly you anticipate heads being the winner, you cannot make that bet. At those odds, a $100 play will only net $33.33 on a winning toss, but you’ll lose your entire $100 on every loss.
Calculating Implied Probability
If you are going to make the right choice, you’ll need to know what the odds tell you regarding implied probability. The implied probability is the number that you will be comparing to the actual odds that you predict. If the implied probability is the lower number, that bet has value.
To determine the implied probability, use the following equation:
So, let’s look at that Houston Rockets game again. The odds of +200 converts to 3.0 in decimal form. That means the formula we solve is:
After analyzing both teams and looking at the statistics, we determined that the Rockets actually have a 50% chance of winning.
Calculating the probability that the odds imply is the first step to determining value, but it only gives you one of the two numbers that we will be comparing. While the implied probability just takes simple math, the percentages of possibility that we handicap can require much more time and effort.
The professional gamblers spend countless hours studying data correlations and building statistical models. They then run hundreds of simulations based on their models and formulate the probability based on the outcome that happens most often. The more accurate your predictions become, the easier identifying valuable lines will be.
Tips for Predicting Probability
Identify Meaningful Data
Regardless of how in-depth you choose to go with your research, it’s important to locate the types of data that have a strong correlation to the outcome of the game. In today’s 24/7 sports news cycle, there is a lot of noise out there that can lead you astray.
Pay attention to which pundits make the most accurate predictions, and which seem to always get it wrong.
You also may want to utilize the numerous sports statistics websites available on the internet. Many of these break down all their stats by quarter or inning. Maybe you will notice a pattern in the data that helps you better identify which team will win a given game. To sustain any level of success, it’s crucial that you continuously pay attention to the sources you are getting your information from, and how useful they are.
Bet What You Know Best
The vaster your understanding of a team, sport, or contest, the better you will able to predict the result. More accurate predictions tend to go hand in hand with familiarity. When you understand the intricacies of a sport or team, you’ll have a better idea of what statistics or factors to prioritize. You’ll also know which statistics or information to ignore.
It is the fastest way to get a feel for consistently finding betting value and keeps you from gambling on things you don’t fully understand.
Keep Records of Your Bets
A good habit to get into is keeping a log of the bets you make. Write down which team you bet, the odds, the reasons you had for making the decision you did, and whether the wager won or lost. Having this information available to reflect on will allow you to pinpoint which thought processes are leading you to the wrong choices, and which are worth repeating moving forward.
Another benefit of keeping an accurate betting log is it makes it easier to see what kinds of bets you’re having the most success with, and vice versa. If you don’t keep a log, it can be difficult to identify your strengths and weaknesses or patterns of behavior you may not be aware of.
The Best Handicappers Build Models
This tip depends on your level of dedication to sports gambling. The most successful sports bettors spend countless hours combing through advanced analytics and tweaking calculations in an attempt to get them as accurate as possible. These handicappers pull data and information from all over and prioritize it based on their observations.
Once a sports gambler’s model is built, they simulate the outcome of a contest thousands of time, collecting as many variations of results as possible. The findings that occur most consistently are what these professional gamblers base their decisions on. Once they have the probability of a team winning, they merely compare it to the implied value, and either place a bet or not.
Calculating Whether a Bet Has Value
We already showed you one way to calculate the implied probability based on the odds being offered. But there’s another simple calculation to help you quickly determine if a wager has a positive value or not. Like the other formula, you will need to determine your own value for “probability.”
Let’s use the +200 Houston Rockets once again. Remember, our models showed that Houston has a 50% chance of victory.
Tips for Long-Term Success Gambling
Shop Around for the Best Odds
Once you’ve made all your predictions regarding probabilities, make sure to check the odds being offered across multiple sportsbooks. The lines being provided by the various operations may differ slightly, and it’s worth your time to find the most favorable odds possible. In sports gambling, the tiniest margins often determine the difference between winning or losing money long term.
Exercise Bankroll Management
Bankroll management is an essential practice for anyone wanting to participate in sports gambling. It involves having predetermined amounts of money set aside for your gambling accounts.
The most important thing to keep in mind with regards to managing your bankroll is never to bet more money than you can afford to lose.
Adhere to a Staking Plan
To best ensure that you earn a profit when you’re making your positive value picks, make yourself adhere to a strict staking plan. A staking plan organizes your bankroll over an arbitrary period of time, for a certain number of bets. For instance, someone who set aside a $1,600 bankroll for the NFL regular season may decide to make one wager a week for $100.
After a loss, it can be tempting to deviate from the staking plan and bet more on the next wager in an attempt to recoup losses. This is a terrible idea and should be avoided at all costs.
You also don’t want to overreact to a streak of luck and begin betting more per wager while you’re hot. Just stick to the staking system that you initially design, you will be happier for it in the long run.
The Wrap Up
For most novice gamblers, it seems obvious to make choices based exclusively on which team they expect to win the game. This approach may work well for a short period of time, but eventually, the uneducated bettor will lose money overall. The only way to actually win is to search out bets that offer a positive value.
Instances when the probability of an outcome happening is higher than the implied probability determined by the odds are considered valuable bets. The most challenging aspect of diagnosing value is correctly assessing the actual likelihood of a team or athlete winning. This can take time, research, and sophisticated analytical models, depending on how seriously you choose to approach sports betting.
It will be tricky at first, but by continually refining your data, and making a note of what data correlates to winning bets, your probabilities will gain accuracy over time. The more accurate your probability numbers are, the easier it will be to compare your results to the implied value and make the appropriate decisions.
Eventually, all that matters is making the proper mathematical choice, and you won’t be able to believe that you used to try merely picking winners.