How valuebetting works
What's valuebetting ?
Value betting is when you place a bet only if the bookmaker’s odds are higher than the “true” probability of the outcome.
You first estimate the real chance of an outcome and convert it to fair odds:
If the bookie offers odds above those fair odds, you have positive expected value (you’d make profit on average over many bets), even though you’ll still lose plenty of individual bets. This is like a coin flip, in the sense that if you flip it only 10 or 100 times, you won't necessarily fall on 50% heads and 50% tails, but when that number of flips goes to infinity, we do reach that 50%/50% scenario. Therefore, value betting is about making money in the long run. You may be losing over a short period of time, but rest assured, overall you will win more than you lose.
This can be checked mathematically, with the expected value (EV) formula, which tells you how much you can expect to make for every 1$ staked:
Let's take an example with, once again, a coin flip. The true odds, since we know the probability of heads or tails happening is 50% would be:
We could therefore calculate the EV for betting on heads or tails (since they have the same probability) with the formula above:
This is perfectly normal, as when we bet on fair odds, we don't lose or make any money long term.
How bookmakers secretly scam you
Instead of giving you fair odds, bookies will give you lower, unfair odds which make you lose money long-term! For example, instead of giving you odds of 2 for heads or tails, they would lower it down to 1.9, for an event which still has 50% chance of happening.
We can therefore calculate the EV in this scenario:
This means that for every 1$ we bet, we lose 0.05$, so a -5% ROI (return on investment). This may not seem like a lot, but let's say you place 30 bets of 50$ each, that means that you should expect to lose 75$! Over time, this and addiction causes regular gamblers to lose everything.
How we take advantage of mispriced odds
Instead of betting on bookmaker's odds that aren't in our favour, to make money long-term we need to bet on odds that offer a positive expected value. Put in another way, we need to bet on odds that are higher than what they should be according to an event's true probability. This would be like betting on odds of 2.1 for heads or tails, we can calculate what this would give us in terms of EV:
This time, for every 1$ we bet, we make 0.05$, so a 5% ROI (return on investment). This may not seem like a lot, but let's say you place 30 bets of 50$ each, that means that you should expect to make 75$! Seeing how fast it takes to place a bet, you can make a solid amount quite quickly. Furthermore, you will often find opportunities with our bot where a bet is expected to have a ROI of more than 5% (sometimes 10% or higher).
Simulations of 300 bets each with an EV of +8%. With a unit size of 50$, you can expect to make 1200$!