How You Can Use “Value Bets” in sports betting

In sports betting/gambling there is a common phrase that “the house always wins.”

This is usually true, but occasionally bookies make mistakes.

These are called VALUE BETS

Here’s what that means and how you can use VALUE BETS to your advantage:

Home » How You Can Use “Value Bets” in sports betting

At a high level, a VALUE BET is any bet that has a higher percentage of return than the associated risk as reflected in the odds i.e. the risk/return ratio is in your favor.

But how do you figure out what that risk/return ratio is? 

You have to understand that a betting line is just an implied probability of a team winning.

To understand how a betting line can be turned into a win probability, check out this chart:

lines are set according to the bookies’ probabilities, plus market forces, and vig (or juice) which is in essence the bookies’ cut of any bet.

So, the first step in finding a VALUE BET is to identify the win probability implied by the line.

Next, you need to compare this implied probability with your own probability on which team will win.

But, how do you get accurate win probabilities?

Option 1: build your own predictive model.

This can be a lot of fun, but can also be VERY time consuming.

Sports books like DraftKings have so much time and money to throw into developing predictive models, that it can be difficult to build a more accurate model than them. 

Option 2: find win probabilities online.

There are many websites dedicated to predicting sports outcomes, some for free, some at a price (check out FanGraphs for accurate, free probabilities).

Ultimately, we will use these win probabilities to find the Expected Value.

What is Expected Value (EV)?

EV is the amount you can expect to win or lose, on average, if you were to place the exact same bet multiple times.

EV lets us quickly find VALUE BETS through an easy formula; removing the need to use an implied probability chart.

The EV calculation is shown in the first image below, and it only takes two inputs: the betting line and your win probability.

A VALUE BET is any bet in which the EV is greater than 0.

The second image is an example, with a betting line of +130 and a win prob. of 57.10%.

value bets sport betting
value bets sport betting

Positive EV bets tend to be found among underdogs.

This means the implied probability of an underdog is more favorable than their true win probability.

Bookies do this since some bettors will think an underdog has a better chance to win than they really do (this is vig). 

11/ In our experience, betting on positive EV underdogs is usually not a profitable strategy.

For instance, in the 2022 MLB season, positive EV underdogs have only won around 36% of the time and have an ROI of -7.41%. 

However, not all positive EV bets are on massive underdogs.

Occasionally, you can find positive EV bets in the “goldilocks zone.”

We consider the “goldilocks zone” to be positive EV bets with plus odds and a >50% chance to win.

“Goldilocks zone” example

On July 31, 2022, DraftKings had the Boston Red Sox at +120 versus the Milwaukee Brewers.

+120 implies a win probability of 45%, but we thought their real win probability was 51.24%.

The Red Sox won the game, and we more than doubled our money. 

This strategy of finding “goldilocks zone” bets is a key ingredient in how our own models find their daily picks.

In our experience, “goldilocks zone” bets in the 2022 MLB season have hit at 49.47%, with an ROI of 13.63%. 

*Disclaimer* this is not gambling/financial advice, please only bet if you are over 21 and live in a state where online sports betting is legal.

If you would like more of this kind of content, leave a reply and check out our other sport betting tips.

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