Welcome to the second article in our series where we ask experts in the sports betting industry the questions you need answered!
For article two, we opened up the debate on arguably the most important concept in betting, as we asked the question:
Q2: How do you define “finding value” in betting markets?
Check out Part 1 of our answers here, where we get the opinions of betting analyst - Joseph Buchdahl, the host of The Business of Betting Podcast, author - True Poker Joe and betting blog - The Church of Betting.
There are two types of value: subjective value and objective value.
Subjective value is if you’re handicapping and making a number and you see enough of a discrepancy between your number and the market number. However, this subjective value is completely reliant on your model spitting out a price more accurate than the market price. This perceived value may not be value at all!
Finding objective value in betting markets goes back to my points from last week - having lots of bookmakers to play into (better known as outs) which allows shopping around for the best price. This objective value is pure with no handicapping or opinions necessary.
The ultimate goal is to beat the closing line by enough to overcome the bookmakers vig. Searching for rogue numbers (objective value) is more reliable and easier than believing you’re better than the market (subjective value).
Almost all of the successful tipsters we review and rate at the Smart Betting Club use the time-worn approach of judging value based on the odds of any bet versus the chance of it winning. For example, if you consistently take 5.0 in odds on a 4.0 in odds chance many times over, you will have a clear edge on the market. The theory in itself is actually quite simple, yet in practice is where so many people fall down.
What do you know that is different to the bookmakers or exchanges where the combined input of so many has led to this bet being priced up at 4.0 in odds? Getting an edge is difficult, especially a sustainable one not based on picking off individual bookmaker pricing mistakes (especially from those 'soft' firms who will quickly limit you if you do this too often) and so this is why so many turn to betting tipsters who have this 'value betting' skill.
I’ve seen new bettors have trouble with this concept. Having run the Dailyprofit tipping site for six years, most new users express a similar opinion that shows they don’t understand what value betting is. When we suggest a bet, we are not saying that the bet will win, we are saying that the odds you can get at a bookmaker are higher than the actual chances of that event happening (according to our models).
For example, our models may show a 15% chance of a team winning, meaning if the same bet was placed 100 times, it would win 15 times (and lose 85 times). Converting this into odds would mean the fair odds for this team winning should be 6.67 in odds. The bookmakers, on the other hand, may have odds that imply only a 10% chance (10 wins and 90 losses) and offer odds of 10.0. In essence, we are buying something for $6.67 when it is worth $10. That is finding value.
Now, 85% of the time this bet will lose and new members will comment on the bet and say, “I can’t believe you thought this team would win, how stupid.” A value bet is not a bet that wins, a value bet is one where the odds you get are a better price than the real chances of that event occurring. You can do this by comparing the odds you got to the Pinnacle closing odds or the Betfair SP price for horse racing.
I suppose the easiest way to define it, is getting betting odds that you think are going to offer you a positive return on your investment. So for example, if I am getting 2.0 (odds representing a 50% win chance) on something that I believe will win 55% of the time. Then that is going to be value by my estimation. The harder part of finding value is getting to that estimation. Personally I use two ways to do this.
The first being similar to the way the Trademate software estimates value. By looking at sharp bookmakers and exchange prices to find outlier prices on other books/exchanges that look to offer value at the time.
For the sport of MMA I use a different approach to finding value using my experience of both competing/training in MMA alongside having watched thousands of fights. So rather than relying on statistical data and being purely numbers driven, I put more emphasis on tape study and looking for fighter narratives that might be being overplayed.
I think that the combat sports markets have some very specific traits. Such as fighters having such big time periods between fights and promotions of real fights sometimes being akin to pro wrestling (WWE) at times. This has led to some very unbalanced betting odds in the past where the value was clearly on one side. The best examples of this were Nunes vs Rousey, Lesnar vs Velasquez and in boxing, Maywether vs McGregor.
Check out Part 1 of our answers here, where we get the opinions of betting analyst Joseph Buchdahl, host of The Business of Betting Podcast, author - True Poker Joe & betting blog - The Church of Betting.
Love getting the opinions from experts in the betting industry? Then subscribe to the Trademate Sports Podcast, where interview the most important people in the sports betting industry, along with the occasional chat about the EPL.
Here are the other questions we got our industry experts to answer:
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