Odds, Values, and Probability in Sports Betting
Contrary to what many people think, sports betting is not purely a game of luck. While this is the most logical thing to think, you would be surprised that there is more to sports betting than guessing which team would win or lose, and no matter how good you are, your predictions will not always be right. Not even if you are a professional bettor. Unlike other casino games, you need to have full knowledge of the sport you are betting on, and more importantly, you need to know how probabilities are calculated. Understanding odds in sports betting, how probabilities are calculated, and how they can help you win are a necessity.
We noticed that beginners play the game based only on luck and sometimes, knowledge of the sporting event, but more often than not, it ends badly with maybe a few drops of tears. Value betting is another important thing to know and understand if you want to succeed in sports betting. Below is a detailed explanation of the importance of value betting and odds, calculating probabilities, knowing your hit rate, and how to use these concepts in your favor. So, relax, digest the content of this article and watch your betting career bloom.
Knowing your hit rate
To start with, we shall explain what hit rate means and how it relates to odds and winning in general. Your hit rate as a bettor is the percentage of successful bets you have had. It is usually calculated as the number of successful bets divided by the total number of bets multiplied by 100. For instance, if you place ten bets and all ten of them are successful, your hit rate will be 100% (which is almost impossible as we have established earlier). However, we wish to annul the misconception of hit rate determining the success of a bet.
If every bet you make is on favorites, and you have a decent hit rate of about 80%, it does not mean you have made a lot of profit. As a matter of fact, you make just a token when you bet on favorites. The reason is simple. Although betting on favorites is a safe way to go, the odds involved are really low because favorites have a high chance of winning in any game. The success is therefore determined by your hit rate and the quality of your guesses, which brings us to the term ‘value betting’.
How to calculate value bet in sports betting
The concept of value betting is one that many bettors, especially newbies, tend to underestimate. But the truth is, it is almost impossible to be a successful bettor without understanding and applying this concept. Before we go into how to calculate value bet, we would like to briefly discuss what value bet means and how it can help to make a profit. A value bet is a bet that has a greater probability of winning than the odds suggest. It basically means you have an advantage over the bookmarkers.
The formula for calculating the value for any bet is; (Probability x Odds) – 1. The bet has a value as long as the result is above zero. Let us explain using an example we can relate to. If the probability of passing an exam is 50% or 0.5(since you can either fail or pass), and the odds of passing are 2.20, the value will be 0.1, which means it is a value bet. However, it is not as straightforward as this in sports betting since its probability is affected by a lot of factors.
What is the importance of odds in sports betting?
Calculating odds in sports betting is quite tough work but if you take time to understand and learn it, it will yield good profits for you. First, you should know that there are three different types of odds: the decimal odds, the American or Money line odds, and the fractional or British odds.
Decimal odds, which are the most common, show the amount that you win for every unit you wager. For example, if the odds are 2.0 and you bet £100, you have a chance of winning £200 if you win that bet. Money line odds have a positive or negative sign in front of them. The positive sign is given to the lower probability event or the event that has a greater payout, while the negative sign is given to the higher probability event or the one that has a lesser payout. If the odds of a game are -200, then you will have to stake €200 to win €100 and if the odds are +200, your gain on that get will be €200 if you stake €100. One type of odd can be changed to another or can be converted to a probability percentage. You have an edge over the bookmarkers if the probability is greater than what the odds imply.
At this point, you are probably wondering why odds are so important. Well, odds are important because they suggest the probability of an outcome. The higher the chance of an outcome happening, the lower the odds, and the lower the chance of an outcome happening, the higher the odds. Apart from that, odds are used to determine how much you get if your bet is successful. The greater your chances of winning, the lower the odds and consequently, the lower the payouts. On the other hand, if the probability of winning is low, the odds will be high and so will the payouts. Odds are calculated by the bookmarkers according to what they think the likelihood of an outcome is to happen.
One way to understand odds set by bookmarkers is to read it in terms of probability. To convert decimal odds to probability, divide 1 by the odds and multiply by 100. Explaining the conversion of fractional odds to probability with this example: if the odds set on a team is 7/5, the probability will be 7/(7+5) multiplied by 100, which is equal to 58.33%. There are also online calculators available for easy conversion.
Conclusion
Value, odds, and probability are three important concepts you should know and understand as a bettor, especially if you want to make profits in the long run.
