How you can make money sports betting

Expected value is the single most important concept in advantaged sports betting. The expected value of a bet can be thought of as the value present in the opportunity. Let's break down the concept through the use of an example.

Imagine a person approaches you on the street, and offers you the chance to bet $1 on the outcome of a coin toss. The coin may land on either of the two sides - heads or tails. Both outcomes have an equal chance of occurring - 50% or ½.

The person offers you $3 back if the coin lands on 'heads' and $1.60 back if the coin lands on 'tails'.

Intuitively we know that the 'heads' option has more value and would choose to bet on it. Breaking it down mathematically using expected value is as follows:

From the above example we can see how easy it is to calculate expected value. In reality, expected value in sports betting isn’t that easy. Sportsbooks wouldn’t ever offer a $3 payout on a coin toss as they also understand how expected value and probability works.

Positive expected value bets only occur in specific cases where sportsbooks are inefficient in pricing their odds. An example of this is if a sportsbook is slow in updating their odds after an announcement concerning the match. In this case, a positive expected value bet may present itself if the probability of the event occurring increases due to the news, while the sportsbooks odds remain the same.

Another question you may be wondering is where do the fair odds or real probability come from?

Calculating the expected value of a bet requires the probability of the event occurring or the fair odds for the event. We can never know for certain the true probability, the best we can do is estimate using a sports betting prediction model. This is exactly what sportsbooks do… so why not use their models? This is the approach WagerWise uses for determining fair odds.

If we take an average of the odds from as many different sportsbooks as possible we can generate a very accurate figure for the fair price. This works on the basis of the ‘wisdom of the crowd theory’.

Example

*Assuming 5% margin

In the example, odds for a particular outcome are compiled from each sportsbook, the margin is removed from the odds and finally an average can be calculated. This average is our best estimate of the fair odds for the outcome. The expected value can be calculated for each sportsbook's odds. We can see Ladbrokes offers a 9.7% expected value bet (2.85 / 2.597).

In the above example we assumed the sportsbook margin to be 5%. How do we calculate the margin with real odds and find what the odds would be with no margin?

To do this we must calculate the book percentage and then subtract 100%.

Example

Here we see a bet option for the winner of the match between 'New Orleans Pelicans' and 'Orlando Magic'. In order to calculate the margin, we must first calculate what’s known as the book percentage. This is achieved by summing the implied probability of each outcome and multiplying by 100.

We have calculated the bookmaker percentage to be 105.34% for these outcomes. The sportsbook margin is simply the extra percentage over 100% - in this case the sportsbook margin is 5.34%. With a proportional amount of money wagered on either side, the sportsbook would pocket 5.34% of the total money.

Now that we have calculated the book percentage and sportsbook margin, we can easily remove this margin to find what the odds would be with no margin. To achieve this, simply multiply the original odds by the book percentage.

Example

For New Orleans Pelicans

For Orlando Magic

To confirm we have successfully removed the margin from the odds, let's calculate the book percentage once again with our new odds.

Removing margin for markets with more than 2 outcomes

Example

There are cases where more than 2 outcomes can exist for an event. Betting on the winner of a soccer match is an example of this, as a draw exists.

The process for removing the margin is exactly the same.

• Calculate the book percentage and margin

• Multiply the original odds by the book percentage

For Australia

For draw

For New Zealand

Table summary:

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WagerWise +EV Bets Software.

Our unique +EV betting software continuously pulls in odds data from your favourite sportsbooks to find the most profitable bets available. From here, members can easily place the displayed bets and generate tax-free income week on week.