Profit in Gambling Through Value 1

0
No votes yet

Part One – What is Value when it comes to Betting?

Profit in Gambling Through Value 1Value in betting is an easy thing to define – whenever you are receiving better odds than you should, you are receiving value – whenever you are receiving worse odds than you should, the bookmaker is receiving value.

In the first of 3 weekly articles here, firstly you’ll see an example of a simple value bet for a bookmaker and how they make money. Then you’ll see why the bookmakers don’t actually have it all their own way.

Profit in Gambling through Value – Bookmakers and Expected Value

Consider the following market on a game of cricket – which team will win the toss? This is an easy market to assign odds to, a fifty percent chance of team A winning, and a fifty percent chance of team B winning.  Now consider what odds the bookmakers might assign to this market – the market would look like this.

Team A     1.91 (10/11)

Team B     1.91 (10/11)

In this example, if the bookmaker were to take a thousand pounds on Team A and a thousand on team B, they’d obviously receive two thousand pounds. If, for example, Team A had won the toss, they’d pay out £1910 to those winning bets – meaning a guaranteed profit of £90. Who is receiving value here? The bookmaker is.

Now let’s look at the same scenario from the punters point of view. You have just placed a £1000 bet on Team A. If team A wins the toss, you win £910. If team B wins the toss, you lose £1000. So what is your expected return here? Here we work it out mathematically.

To do this, we multiply the probability of how often we win by the amount we win. Then we do the same with how often we lose by the amount we lose. Then we add the two together.

0.5 * £910 = £455

0.5 * - £1000 = - £500

£455 - £500 = - £45

Here, it is clear that each time we place the bet, our overall expected outcome on the bet is a loss of £45. So once again, who is receiving value here? The bookmaker is.

Indeed, if two punters placed a bet of £1000 on either side, they’d both expect to lose £45, and the bookmaker would win £90, as stated above.

But you might argue that in this scenario, one punter would actually be in profit for £910, happy days surely? Well done to that punter, but in the long run, if the punter effectively hands over £45 to the bookmaker every time they place a bet, they will not win money at gambling. The only winner here is the bookmaker.

So how can you win money on this market? There is a very simple answer to that question. You can’t! This leads to a very important point.

If a bookmaker has priced up an event perfectly, it is IMPOSSIBLE to make an expected profit on it.

In the above example, the bookmaker knew the exact odds, and is able to price it up perfectly.

Profit in Gambling through Value – Gaining Value

Profit in Gambling through Value – Gaining ValueSo far, it might seem that the bookmakers hold all the cards and are making an expected profit on any event? Actually that isn’t true. In the above example, the odds of either side winning were easy to work out, and the same applies to roll of a die, the turn of a card or the spin of a roulette table. However, consider what happens when the event becomes more complicated? Take a soccer match as an example. How straightforward is it for a bookmaker to price up the exact odds on a particular match? It’s actually impossible to do, all the bookmakers can do is make the best guess that they can. The bookmakers will use as much information as they possibly can to price up a particular market. The same theory applies to any market a bookmaker will offer – they will make the best guess they can at what odds should be on offer.

So, let’s look at that important statement again:

If a bookmaker has priced up an event perfectly, it is IMPOSSIBLE to make an expected profit on it.

There is a bit of good news for the punter here – it is almost impossible for a bookmaker to price up an event perfectly – and in very simple terms, this is where the punter can win money. If a gambler can predict an event better than a bookie, then there is an opportunity to win money from the bookie.

Profit in Gambling through Value – Part 1 Overview

You’ve seen how a bookmaker can guarantee an expected profit on a simple market, and how a punter will effectively lose money whether they win or lose on these markets. I’ve also touched on the fact that bookmakers can’t price up many events perfectly, and the fact that this can give an edge to the punter. In Part 2, I’ll look at specializing on a given sport, and pricing using probabilities.

Planet Mark's Top Rec:

32Red are giving the old 'High Street Bookies' sports betting brands some real trouble in 2019.

This very slick site offers top-rated odds; a huge range of bets and a big list of player promotions (really, check the latest before you bet elsewhere). This now includes an excellent 100% profit boost offer for all new players.

32Red are my go-to betting site, you’ll quickly find out why once you see www.32red.com/sports for yourself - check them now!

 

30181

 

Planet Mark's Top Rec:

32Red are giving the old 'High Street Bookies' sports betting brands some real trouble in 2019.

This very slick site offers top-rated odds; a huge range of bets and a big list of player promotions (really, check the latest before you bet elsewhere). This now includes an excellent 100% profit boost offer for all new players.

32Red are my go-to betting site, you’ll quickly find out why once you see www.32red.com/sports for yourself - check them now!

 

30181

 

Planet Mark's Top Rec: There are a lot of good reasons why Bovada are the number #1 US friendly sportsbook. Look beyond the big welcome bonus and you'll find the real magic...

Bovada have a huge range of markets (especially when it comes to the bigger events), competitive lines and super-easy deposits / withdrawals.

The killer reason is the promos – you’ll find their list of offers for regular bettors unrivalled anywhere online. Check out www.bovada.lv to see the latest deals for yourself now!

Bovada Sportsbook

More in this series on Value Betting: