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How To Calculate Expected Value (EV) For Sports Betting

Expected value or EV can be an extremely valuable metric for sports bettors to make a positive change in their success probability.

If you are a bettor who wants to be a success in long-term, you need to indulge into football bet analysis which is important to ensure that your wagers are not based on just impromptu sentiments but concrete numbers and calculations.

What is the Expected Value?

Simply put, Expected Value is the measure of how much a bettor can expect to win or lose from wager if he placed it on the same odds every time.

The EV value is expressed in positive and negative.

A positive EV or +EV implies that you are expected to make a profit over the long-term from a bet.

Similarly, a negative EV or -EV is an indication that the bet will result in losses over the long-term.

The higher the EV value the better the value bet.

We know it all seems confusing at the moment, but allow us to illustrate with an example.

The coin flip makes for an ideal example and is the easiest way to understand how to calculate expected value.

Assume that you are betting on the outcome of the coin flip. Suppose a bookmaker is offering you a +110 for the coin flip outcome i.e. either a heads or tails. This means you will win $50 for every $100 you wager.

This gives a +0.5 EV. Do not worry about how to calculate the expected value as we will be discussing it later in the post.

Why Expected Value Is Important

Most beginners do not pay enough attention to the intricacies and look for opportunities that seem to be winners. They usually look at the matchups and then decide based on their intuition, which is a wrong strategy and not a profitable way to bet.

Instead of covering the spread every time, sometimes it helps to bet on a team that is expected to win.

Wondering, why?

Predicting winners is not easy for every bettor and in the long run, it becomes difficult to remain profitable. This is how sportsbooks make most of their money.

Recreational bettors never become successful enough because they are under the impression that their sports knowledge is better than bookies. But we know that if it was true, most ardent sports followers would be millionaires.

But it doesn’t happen. Because sports are inherently unpredictable.

Expected value minimized this unpredictability that makes one more profitable over the long run.

Here’s the fact:

Those who understand Expected Value will become profitable sports bettors more than those who just understand the sport they are betting on.

This is possible because EV is based on numbers. It indicated how much value is there in a bet. Bets that have a positive EV value are of good value, with negative EV bets having a poor value.

Furthermore, EV helps you to sift through everything you already know that helps you to refine your knowledge. Pay attention to EV and will instantly have a much better chance of improving your wager than if you don’t.

How to Calculate Expected Value in Sports Betting? 

The formula for expected value is quite simple. In equation form it is represented as:

    EV = (Probability of Winning * Amount to Win) – (Probability of Losing * Amount to Lose)

It is a simple formula for expected value that will help you to make more money. All you have to do is to multiply the probability of winning a bet with the amount you will win then subtract the probability of losing multiplied by the amount you will lose.

Here’s how to calculate expected value from real values:

Convert the odds into Decimal odds, use our Odds Converter

Calculate the probability of winning and the amount you will win

Calculate the probability of losing and the amount you will lose

Enter the values into the formula

Now let’s understand it with an example.

Suppose you are betting on an NHL game. You want to bet on the Capitals but are not sure of the win or loss. You can be surer by calculating the EV here.

Step 1: Calculate the decimal odds

Assuming you are given the odds for the Capitals as +115 and the opponents -135, you can easily convert them to decimal odds using our Odds Converter. You will get 2.15 and 1.74 respectively.

Step 2: Calculate the amount you will win from winning bet.

Amount to Win = (Stake * Decimal Odds) – Stake

Assuming you are betting $100 the winning amount will be: ($100 * 2.15) – $100 = $115

Now the probability of winning the bet:

Probability of Winning = (1 / Capitals Decimal Odds) * 100%

That is, (1 / 2.15) * 100% = 46.51%

Step 3: Calculate the amount to lose

This is simply the stake you will put, i.e. $100.

Now, calculate the probability of losing the bet.

Probability of Losing = (1 / Golden Knights Decimal Odds) * 100%

It will be, (1 / 1.74) * 100% = 57.47%

Step 4: Calculate the EV using above value.

EV = (Probability of Winning * Amount to Win) – (Probability of Losing * Amount to Lose)

Putting in the values give,

EV = (46.51% * $115) – (57.47% * $100) = $53.49 – $57.47 = -$3.98

The negative Expected Value indicates that you will be losing $3.98 for every $100 staked on average.

How Expected Value changes the way you bet? 

First, you have to understand that a negative EV doesn’t mean you will lose money over the long-term necessarily but it means you are most likely to lose money.

Sports betting odds are subjective which means the value of EV can change if you are not using implied probability of betting odds. For instance, in the above example, the Capitals have a 46.51% chance of winning. But if you use Poisson distribution then the chances jump to 51% and the EV changes from negative $3.98 to positive $1.18.

Calculating EV also gives you a better understanding of the value in a bet as you discover a lot more information than the sportsbooks usually provide.

Finding Value Bets

Finding value in the sports market meaning finding the odds that are underestimated by the sportsbooks that give a chance to make huge profits. If you find such a spot, then calculate the EV and you will know how much value actually lies in that bet.

However, keep these points into consideration:

+EV Bets do not guarantee wins-it helps to find a better value

-EV Bets do not lose every time-they indicate not long term profits

Low odds still have value-they only imply you will not make a huge profit, this is why low odds are not -EV

Conclusion

Expected Value is a wonderful tool to help you decide whether to bet or not based on the profitability or loss in the long run.

EV is not an indication of whether a bet will lose or win. This is why use it for the intended purpose, i.e. to find real value in a bet and not to make predictions.

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