Value Betting Introduction

There are ways to profit from bookmakers without using promotions and special offers. One of these is ‘value’ betting, which many people adopt as a natural progression or addition to their matched betting activities. It opens up a whole new world of profit-making possibilities with very high potential returns. However, it involves a certain level of discipline and taking a long-term view.

Let’s dive straight in and learn the core principles, why value bets occur (and how to find them), and how variance can affect your profits.

What is value betting?

Value betting is the practice of identifying bets where the odds offered by bookmakers exceed the true probability of an outcome. An individual bet may still lose, but over the long term, this gives you an advantage over the bookmaker.

Value betting prioritises long-term profits over short-term wins. In the short term, you may have a run of losing bets – this is called ‘variance’ and is something I’ll talk more about later.

I’ll also explain why a bookmaker may offer odds higher than the true probability. But now, let’s see what a value bet looks like if the event I was betting on was a coin toss.

Value betting example

We all know the probability of tossing a coin and it landing on heads is 50%. Expressed as decimal odds, 50% probability would be 2.00. You can learn more about decimal odds here.

But let’s say a bookmaker is offering odds of 2.20 on heads. These odds imply heads will occur 45.45% of the time, which we know isn’t true. By repeatedly betting on heads, we will win more often than the bookmaker expects us to and profit in the long run.

Variance and Expected Value (EV)

In the short term, you may have a run of five tails in a row and incur a loss. The chance of this happening is about 3%, but it can and will occur at some point. On the flip side, you could get a run of five heads, which is the same probability.

Does this change the probability of the next coin toss being heads from 50%? No. Played over a large enough number of goes, you will always end up with heads 50% of the time and tails 50% of the time.

These fluctuations in the short term are called ‘variance’. You need discipline and enough bankroll to be able to ride them out. Ultimately, this means value betting is not for everyone. You can’t be disheartened by a run of losses or carried away by a winning streak. Your bankroll must be high enough to incur these losses without wiping it out.

The number of bets required to achieve the long-term average can be much higher than many think – often hundreds or thousands. Value betting is all about volume. The more bets you place, the less you are impacted by variance.

So, how do we tell how much profit we should make in the long term? We use something called ‘Expected Value’, or ‘EV’ for short.

Let’s take our coin toss example. The bookmaker offered odds of 2.20 when the true odds were 2.00 (50% probability). We use the following formula to calculate the expected value:

Let’s put in values from our example:

0.1 as a probability is the same as saying 10%. Therefore, our example has a 10% expected value. In the long term, for every £1 you put in, you should get £1.10 back. The higher the expected value of your bet, the more you will make over the long term.

If you look at the amount of money you have over time while value betting, you may end up with a graph similar to the one below. In the real world, you’ll often deal with value bets with a much smaller chance of a win than 50%. As a result, you can have longer losing streaks, but when you do win, you win big.

Why you shouldn’t lay value bets

When matched betting, you often lay the opposing outcome to minimise your losses. However, with value betting, you don’t need to place lay bets.

If you were to lay bets when value betting, you would reduce your losses, but you’d also restrict your wins. That’s okay if you want to minimise the variance, but the problem is the commission that the exchange takes. If an exchange took 2% commission, and you’re placing bets with an expected value of 5%, you would lose a chunk of your profit to the exchange.

As a bonus, not having to place a lay bet saves you quite a lot of time.

Why do value bets occur?

By now, you’re probably wondering why bookmakers offer odds that are higher than the true probability. There are a number of reasons.

Some bookmakers are extremely good at determining the true odds of an event and then applying an overround (a little bit extra that ensures the bookmaker makes a profit). These bookmakers are known as ‘sharp’ bookmakers or ‘sharps’. You can even get bookmakers who are sharper in some sports than others. They can factor in large bets made by specific players who have developed highly accurate models to predict the actual outcome. Bookmakers also look at each other’s odds to assess the broader market. When shifts occur, some react very quickly. Others react more slowly. Those who respond slowly present an opportunity to get odds higher than the more knowledgeable bookmakers say they should be.

Sometimes, value bets occur because of simplifications in calculating the odds for specific events. Take each way bets. You calculate the place part by taking the odds of the horse winning the race and dividing by a predefined number based on the number of runners. For example, a race involving 5-7 runners often pays 1/4 of the win odds as the place part (2nd or 3rd place). But not every horse has the likelihood of finishing in a place position that is one-quarter of its chance of winning the race – such as the third favourite. In specific scenarios, you can exploit this to your advantage.

There are many more reasons, like markets overreacting to the news of an injured player. A bookmaker could also deliberately give worse odds if they know an outcome will be heavily backed by regular punters – like a popular football team. Because it’s so heavily backed, they can prioritise making a profit on that outcome, even if it leaves some value on the less popular outcomes.

There are many more reasons why value bets can exist. Some are reasonably well-known but underutilised, while others are more obscure.

How to find value bets

As you’ve probably guessed by now, finding value bets is challenging, and bookmakers are generally very good at determining the true odds.

There’s a sea of data to wade through, and finding value can feel like searching for a needle in a haystack.

There are options out there, though. While they may require you to pay a monthly fee, the potential profit they unlock offsets it.

One in particular — OddsMonkey — even offers a ‘profit guarantee’. If you don’t make a profit within your first 30 days (within the number of bets specified in their terms), they’ll give you another 30 days for free.

For that reason, and because of their relative affordability compared to similar tools, I’m going to look at their offering in more detail. They also offer a natural progression for matched bettors, as matched betting tools are their core offering.

At the time of writing, OddsMonkey has four primary tools for value betting. Some of these are ‘pure’ value betting tools that don’t rely on a bookmaker promotion. Others use value betting principles to boost your current matched betting activities.

1. 2UP EV

2UP offers are a staple for most matched bettors. Their 2UP tool helps you find opportunities to profit from those offers. 2UP EV takes this further by using historical analysis, trends, form, and home team advantage to see which opportunities are likely to be the most profitable.

2. Extra Place EV

Similar to the above, this tool improves upon an existing formula. It takes advantage of the bookmaker’s simplified calculation for each way bets and shows you which are most likely to hit the extra place and win big. You can learn more about extra place offers here.

3. Lucky Finder EV

The Lucky Finder EV tool offers something new by analysing high-value accumulator bets, which are easily overlooked by others looking for value. It then puts them into a suitable Lucky 15 bet to maximise your profits.

4. Price Boost Matcher

The Price Boost Matcher finds short-lived price boost offers and presents them in a way that allows you to place your bets in seconds. Speed is the key with these short-lived offers.

As you’ve seen, OddsMonkey offers plenty of routes into value betting, including as a means to improve your current matched betting activities. Their profit guarantee underlines just how confident they are in their tools. If you want to give it a try, they’re offering early bird pricing until the end of November – a 55% discount on a yearly subscription (£449 instead of £999). Their value betting tier also includes all their matched betting and casino tools.

Boost Your Profits with Value Betting

If you don’t make a profit in your first 30 days, OddsMonkey will give you another 30 days free of charge.*

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*Terms and conditions apply. See OddsMonkey for details.

Conclusion

As you’ve seen, there’s an excellent opportunity for those with the discipline and understanding to try value betting. It’s one of the most popular areas people explore in addition to matched betting. Many of the principles can be used to give your matched betting an extra boost, too.

It’s just a matter of knowing where to find value and committing to focus on long-term profit over short-term gains.