Sports betting is all about locating the betting value in sports events.
Understanding the definition of value in sports betting is key to understanding how to make money when betting on sports. To simplify matters, sports betting value is when you find a bet that is paying out winners at a better rate than it should.
Here’s a simple analogy before we get into the nitty-gritty. Let’s say that you are looking for work, and you feel that your skills are worth $20 an hour. You find a job that is paying $100 and should take you about five hours. Is there value there? Not really, at least in the sense we are discussing. The job is paying you your value, or what you feel you deserve, and there's no extra additional value outside of that value.
But what happens when you find a job that should take you only four hours, but is still paying $100? You’re getting paid at a much higher rate than you think you should. This extra amount of money represents extra value. In sports betting, you’re looking for bets that are going to pay out better than you think they should or what you think they are worth.
Now we need to tackle the concept of implied probability. It's a crucial part of understanding value and how to find it in this industry.
When a betting company puts out odds on outright outcomes, they are telling you how much you will get paid out for placing bets on those outcomes. What they are also telling you is the percentage likelihood that that rate equates to. This percentage likelihood is known as the implied probability. It’s basically what per cent of the time the sportsbook's line says you should win the bet, all things considered.
💻 Example of implied probability
Let's assume that you're betting on a game, and the team is +300 (or decimal odds of 4.00). If you convert this to an implied probability (which we will show you how to do soon), this equates to 25%. This means that the sportsbook thinks you are going to win this bet 25% of the time, or 1/4 times. The sportsbook feels this is the fair rate for this bet. If the sportsbook is correct, you should break even on this bet.
Imagine that you bet $100 on this game. If you win your bet, you will receive $300 in profit. Let’s also imagine that the sportsbook is right and that you win this bet once out of every four times (25%). Let’s see what your profit and loss looks like.
This graphical illustration via The Sports Geek clearly shows that this customer has broken even.
It’s important to know how to convert money lines to implied probabilities if you’re going to find value in your bets. This odds calculator is a quick and easy way to convert your conventional decimal odds to their implied probability. These calculations can also work the other way around.
If you believe that a team has a 50% chance of winning a match, you can plug that into the calculator. If the decimal figure produced is lower than the figure you see on a sportsbook, it's probably a good bet. So in the example that you believe a team has a 50% chance of winning, anything above 2.00 on a sportsbook is good value.
In the next segment, we will elaborate on the concept of implied probability.
📲 Catch up on our article covering best betting strategies to employ in case you missed it!