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Expected Value in Sports Betting

by December 6, 2018
Tom Brady

For new sports bettors, there are always a lot of things to sift through. In fact, knowing and finding the right information is much of the battle for the novice bettor. But with so many words and terms like vig, hedging, EV, ROI, props, parlays, fading the public, betting systems, and many more, just to name a few, it can be easy to get information overload. Even if a new bettor does research every word or term he or she comes across, it’s hard to know what is essential and what isn’t.

Expected value is essential. Putting it bluntly should make it easier for new bettors to see. Expected value, or EV for short, might just be the easiest way for new bettors to find great value bets (hence the name!). While all those other words and terms are important to know and understand as well, a bettor can survive with a great understanding of EV.

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So what is expected value in sports betting? It is the measure of what a bettor can expect to win or lose on each bet placed on the same odds time and time again. Positive expected value (+EV) implies profit over time, while a negative value (-EV) implies a loss over time. Obviously, the higher the EV goes, the better value the bet.

The most basic example of expected value is the good old coin flip. Let’s say that someone is willing to pay a bettor an $11 return for a $10 bet on either heads or tails. For each bet, the EV would be .5. Each time the bettor wagered $10, he or she could expect to win $0.50. This makes the bet a +EV bet. When done enough to remove luck from the equation, the bettor should profit.

Expected value is easiest to understand when broken down into three parts, why it is important, how it’s calculated, and how bettors can find positive EV bets.

Why Expected Value Matters

New sports bettors often think that they should bet on “winners.” They look at a game, come up with who they think will win or cover the spread, and bet accordingly. These amateur sports bettors become completely taken aback when told this is not the way to profitably bet. They’re really thrown off their rockers when they hear that sometimes, teams they actually think might lose (or not cover the spread) are the better teams to put a wager on.

Why is this the case? It’s because not many people can simply guess the winners of games of spreads with such a high accuracy that it’s profitable. In fact, that’s exactly how sportsbooks make most of their money. Amateur bettors think they can outsmart the system with their litany of “sports knowledge.” If this was the case, anyone who watched enough sports could be rich.

Sports are unpredictable, but expected value isn’t. Put it this way. The argument can be made that someone who understands and can use EV, but has very little sports knowledge, will profit more betting on sports than someone who has a plethora of sports knowledge but does not understand EV.

Again, this is true because expected value does not take anything into account besides the numbers. It tells a bettor the value of a potential wager, plain and simple. If a bet has a +EV, it could be a good value. If a bet has a -EV, it could be a poor value. Furthermore, expected value can help new bettors sift through things they already know. EV matters, and new bettors who use it and pay attention to it give themselves a much higher chance to succeed.

Calculating EV

Whoa, whoa, whoa, you mean to tell me you didn’t pay attention to expected value in high school math class? And you don’t remember the simple formula for it? Wow… how disappointing. All jokes aside, calculating expected value for a sports bet doesn’t take much effort. Multiply the probability of winning with the amount that could be won per bet, and subtract the probability of losing with the amount that could be lost per bet. The formula looks like this:

(Probability of winning) x (Amount won per bet) – (Probability of losing) x (Amount lost per bet)

The best part about this simple formula is that nowadays, the internet will do some of the work. Head to an online sportsbook and find the decimal numbers for the amount won per bet. To find the probability of winning, check out articles from BettingPros’ experts on betting systems, and pick one to use. Plug the numbers in, use a calculator to figure the equation out, and boom. Calculating EV is simple enough it becomes a secondhand element of sports betting.

Finding Value Bets

None of this matters if the bettor can’t find +EV bets. Finally, this is where a little bit of common sense and sports knowledge comes in. In fact, most everyone who is reading this article probably does a little bit of value finding already. Basically, finding value bets means looking for opportunities where sportsbooks are offering higher odds than should be expected in any market or on any sport. So, spot an area where it looks like oddsmakers may be a little off, calculate the EV, and check how great of a value a wager truly would be.

There are a few things for a bettor to keep in mind when looking for value bets.

A +EV bet does not always mean the wager will win money.
The bet still has to win! EV just shows whether or not the bet is a good value. Again, EV works as a fantastic tool, but a +EV bet on an underdog will not always win.

A -EV bet isn’t going to lose every time.
Sports betting is a guessing game. Even though a wager might not be expected to net a profit more times than not, that’s far from a guarantee when doing it once. Sometimes, a wager on a heavy favorite will turn out to be a -EV bet. The -EV means the bet is a bad value, not that the heavy favorite will necessarily lose. 

Low odds can still offer value.
Just because odds are low does not mean there will not be a +EV bet. All it means is that a bettor isn’t going to get rich off of the bet. If a bet is +130 but calculations say that it should probably be a little closer to +120 or +125 value is still there to be had!

If a bettor outsmarts the bookmaker, money can be won.
This is basically what sports betting boils down to. Outsmart the bookmaker and the bettor can net a profit. Expected value is a great piece of information to help do so.

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Alex Altmix is a featured writer at BettingPros. For more from Alex, check out his archive.