Value Betting Explained: How to Find and Profit from Positive EV Bets
Value betting is placing bets only when the odds offered are higher than the true probability of the outcome. This will teach you about expected value, calculating your edge, dealing with variance, and how bookmakers will respond when they spot a profitable bettor.
Complete strategy guide
8 minute read
For serious punters
1 What Is Value Betting?
A value bet is placed at the odds when the offered odds from the bookmaker are higher than the true probability of the outcome. Bookmakers have underestimated the chances of the event.
Most punters focus on the winner of the bets they place. Value bettors focus on whether the odds placed on the sports events are right or too high for the chances of the sports teams to deliver the winning outcome.
This is crucial to understanding how profitability works for punters. A punter who picks sports event winners 55% of the time will lose money if they place their bets at bad prices. A punter who picks winners 45% of the time will win money if they consistently find sports events at overpriced odds. The price set on sporting events is more important than the outcome of each bet.
2 Expected Value - The Maths Behind Every Bet
Expected value (EV) represents the average value of all the bets that a punter will place over time. If it is a positive value, the bet will be profitable over time. If it is a negative value, the bet will lose money over time. Every bet has a positive or negative expected value. Most bets that punters make at bookmaker set prices have a negative expected value for the punter.
Example: You assess a team has a 60% (0.60) chance of winning. The bookmaker offers $1.85.
EV = (0.60 x 1.85) - 1 = 1.11 - 1 = +0.11
This bet has a +11% expected value. For every $100 staked on this bet repeatedly, you expect to profit $11 on average.
Positive vs negative EV in practice
Placing bets on a team at $1.60 at true values of 60% of winning will produce the following EV: (0.60 x $1.60) - 1 = $0.96 - 1 = -$0.04. The sports event will have a negative 4% expected value. Even if the punter correctly identified the sports teams that will win matches at a true value of 60%, the odds offered by the bookmaker are too low to be profitable.
This is why the bookmaker's prices on sports events are as crucial to value betting as sports event outcomes are.
3 Implied Probability and Finding Your Edge
All bookmaker odds represent the implied probabilities of an event's outcome. Value betting is about noting the difference between the implied probabilities and your own assessment of the true probabilities of sports event outcomes.
Example: Odds of $2.20 = (1 / 2.20) x 100 = 45.5% implied probability.
If you assess the true probability at 55%, the bet has +EV.
Where bookmaker prices come from
Bookmaker odds are established through different statistical models. As punters place bets on certain outcomes, bookmakers adjust the prices to balance the amount of money that they will expose themselves to.
Closing line value
Closing line value (CLV) is a tool that professional bettors use to assess the quality of the odds that they take on sports events. The closing line is the odds offered by bookmakers just before the sports events start. If the odds that you take on events are higher than the closing line, it means you are finding value. If your odds are worse than the closing line, it means you are not.
CLV is a crucial tool for any punter to monitor their profitability over time. The outcome of any individual bet will reveal nothing. It is the consistency of your betting odds relative to the closing line that will indicate if you are on a winning strategy or not.
4 How to Find Value Bets
Find value by establishing your own probabilities for sports event outcomes. Then, compare those probabilities with the odds that bookmakers offer. Alternatively, focus on the prices established by sharp bookmakers and identify bookmakers that are offering odds that are lower than the markets.
Bookmakers that run a best odds guaranteed promotion automatically pay the highest available starting price - a useful base when value hunting across racing and sports markets.
Independent analysis
Find the probability of the sports team that you are betting on. Convert the probability to a percentage. Note the odds offered by the bookmaker. If the odds that the bookmaker offers contain a lower probability percentage than the one that you have calculated for the sports teams, then you have found value in the odds that the bookmaker is offering.
The quality of your analysis of sports events will directly determine the accuracy of your probability estimates. Guessing at sports outcomes is not a system that will allow punters to profit over time. For punters to profit from their betting activities, they have to consistently find value in the sports events that they select.
Line shopping
The best strategy for most punters to find value in sports betting is to maintain accounts with a variety of bookmakers. Bookmakers do not all offer the same prices and odds on the same sports events. By placing bets at a bookmaker that offers $2.50 on a sports event and another bookmaker that offers $2.80 on the same sports event, the punter will find value in the odds of the latter bookmaker.
Using sharp bookmakers as a reference
Bookmakers that accept high-value punters, also referred to as sharp punters, will offer prices on sports events that are more accurate than recreational bookmakers. If the sports outcomes are priced at $2.10 by a sharp bookmaker and $2.40 by a recreational bookmaker, the recreational bookmaker is offering value relative to the prices set by sharp bookmakers.
Betting Approaches Compared
| Approach | How it works | Long-term profitability | Skill required |
|---|---|---|---|
| Gut / impulse betting | Pick outcomes based on feeling or team preference | Negative - house margin applies | None - random |
| Following tipsters | Copy selections from a paid or free service | Depends entirely on tipster quality | Low - selection only |
| Line shopping | Compare prices across bookmakers, take the best | Marginally better than average - reduces margin | Low - process discipline |
| Value betting | Bet only when price exceeds your assessed probability | Positive if assessments are accurate over large samples | High - requires accurate probability estimation |
| Matched betting | Use promotions and exchange to cover all outcomes | Low risk profit from bonus value - not from odds edge | Medium - process and offer management |
5 Managing Variance - Why Losing Streaks Happen Even With an Edge
Even if a punter places bets that have a positive expected value, there will be losing streaks. It is a fact of probability that a punter with a genuine 5% expected value for each sports event that they place bets on will lose money during certain periods of time.
Just as a coin that has a genuine 52% chance of landing on one side will have a string of landings on the other side in a row, a punter who places sports bets that have a positive expected value will experience losing streaks of 10, 20, or more bets.
The danger of short-term results
A punter who experiences a losing streak will abandon their betting strategy. Such an action is similarly destructive as increasing the stakes that a punter places on sports events during winning streaks.
Volume is the solution
The more bets that a punter places at a positive expected value, the closer their sports betting results will be to their true expected value. The reason that professional punters place many bets on a variety of sports events is that the more bets that are placed, the more the outcomes of each individual bet will cancel each other out and result in a true return on the amount of money that was staked on all the bets.
6 Bankroll Management for Value Bettors
How a punter manages their betting bankroll will determine whether they will experience losing streaks that will wipe them out. Even with a betting strategy that has a positive expected value, a poorly managed bankroll will result in the punter busting their account during a losing streak.
Flat staking
The simplest form of bankroll management is to place a flat stake on each event. A punter can start by placing 1% to 2% of their total bankroll per bet. At 1% betting stake, a punter who loses 20 bets will have 82% of their bankroll left. If they place 10% of their bankroll on each event, however, they will have no bankroll left after 20 losing bets.
After 10 consecutive losses: $1,000 - (10 x $20) = $800 remaining (80% intact).
At 10% per bet: $1,000 - (10 x $100) = $0. Bankroll destroyed by normal variance.
Adjusting stakes as your bankroll changes
Placing a fixed percentage of your current bankroll means that your stakes will automatically vary. The stakes will decrease during losing streaks as the punter's bankroll decreases. The stakes will increase during winning streaks. This form of bankroll management is superior to placing a dollar amount on each sporting event. The strategy will provide the best return on a punter's bankroll over the long term.
Keeping a separate record
The only way to determine if a punter's betting strategy has positive expected value is to track the outcomes of all their bets. For each bet, they should note the odds, the stake that they placed, the outcome of the event, and whether the odds that they took on the outcome beat the closing line for the event. After noting these variables for at least 500 bets, the punter can determine if their strategy has value. With fewer than 500 bets, any conclusion reached is unreliable due to the variance in outcome.
7 Account Management and Bookmaker Limits
Bookmakers are private businesses. They are not obliged to take bets from punters who win a lot of money. Most will not. Bookmakers will place limits on the amount of money that a winning punter can stake on events with the highest percentage of winning outcomes.
A punter who wins a lot of money will eventually reach the limits of their maximum stakes on bookmakers with soft maximum stakes. A punter with a $500 maximum stake might be limited to $10 or $20 stakes on winning events.
Extending account life
Placing occasional small bets on very popular events will extend the life of a bankroll that is winning at bookmakers. This is because bookmakers will think that the punter is acting like a recreational punter rather than someone who has developed a winning system. The effectiveness of this strategy depends on the bookmaker to whom the punter is placing their bets.
Sharp bookmakers and exchanges
A few bookmakers will accept bets from punters who have a winning strategy. Sharp bookmakers will accept money from high-stakes punters who have winning strategies for the sports events that they place their bets on. Bookmakers that use betting exchanges will not limit winning accounts. They do not care if punters win as they take a percentage of the winnings of each bookmaker. The prices on betting exchanges are much better than the prices on recreational bookmakers but are limited on many sports events. For a full explanation of how exchanges work, see our guide to betting exchanges.
Frequently Asked Questions
What is a value bet in simple terms?
A value bet is made on sports events when the odds offered by bookmakers are higher than they should be relative to the true chance of those teams winning the matches. If a punter believes that a sports team has a 60% chance of winning a match, and the sports bookmaker offers odds that imply only a 50% chance of that outcome, then it is possible for a punter to place value bets on that sports event.
How do I calculate expected value on a bet?
To calculate the expected value for any given bet, all that a punter has to do is to multiply the decimal odds by their probability of the sports teams winning and subtract 1. If the decimal odds are 2.10 and the probability is 55%, 0.55 x 2.10 = 1.155 - 1 = 0.155. At these odds, the punter will win 15.5 cents for every dollar that they stake on the sports event. If the result of the calculation is a negative value, the punter will lose money over time if they continue to place such bets.
Will I still lose individual bets if I have an edge?
Yes, always. Positive expected values for punter's bets do not guarantee them wins on any given bet. The expected value represents the average number of winning bets that will be made over a very large number of bets. The outcome of any given bet can be either win or lose. It is the long-term result of a punter's betting activity that will determine whether their system has a genuine expected value.
What is closing line value and why does it matter?
The closing line value of a punter's bet is the difference between the odds that the punter took on a given event and the odds that were offered just before the event started. The sports markets will become more efficient in the longer term. If the punter's odds are consistently higher than the closing line for events that they take, then they are finding value in the outcomes of the sports events.
Why do bookmakers limit or close winning accounts?
The recreational bookmakers that offer sports event bets use the overround of the outcomes of the sports events as a way of profiting from the majority of punters who do not have an edge on the bets that they make. When punters take many bets with high expected values, the bookmaker will lose money. To protect their profits, such bookmakers will place limits on the amount of money that a winning punter can stake on bets. Sharp bookmakers and bookmakers of betting exchanges do not work in this way.
How much of my bankroll should I stake per bet?
Value bettors usually stake between 1% and 3% of their total bankroll on each bet. Using such low stakes ensures that the bankroll is protected during losing streaks. The longer that a punter can commit their money to sports betting, the more returns they will earn on their investments in such a strategy. Staking a higher percentage of one's total bankroll means that a losing streak will have a higher potential to wipe out the bankroll of the punter. Most beginners in the world of sports betting start at 1% to 2% of their total bankroll per bet.
Responsible Gambling
Even mathematically sound betting strategies carry real financial risk. Variance means you will lose money during certain periods regardless of your edge. Never bet money you cannot afford to lose, and never increase your stakes to chase losses. A disciplined bankroll approach is the only way to survive long enough for an edge to materialise.
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