Profitable betting strategies rely on the ability to find bets offering high value-for-money. Consistently sniping these bets is called Value Betting, a core concept behind FighterOdds.ai profitable betting strategy.
Contents
Summary
- The Expected Value expresses the value-for-money of a bet
- When the bet potential profit is higher than the risk, the Expected Value is positive and we found a Value Bet
- Value Betting is a strategy focused on sniping Value Bets to build and sustain profit in the long term
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Expected Value: finding value-for-money
Not all bets are created equal. Some bets have the potential to deliver more profit for less money so, they are more valuable than others.
Can you find the value?
Without knowing much about the fighters, which bet from Book 1 provides the best value-for-money?
| Outcome | Odds |
|---|---|
| Striker Wins | 1.85 |
| Grappler Wins | 2 |
Casual punters may think that Grappler provides the best value because of the higher payout. Unfortunately, the truth is that with only this information at hand is not possible to to identify the best value-for-money opportunity.
Smart betting explained
In order to find the best value we need an accurate assessment of the fighters’ winning probabilities. Consider this new version augmented with accurate winning probabilities similar to those provided by FighterOdds.ai on real UFC fights:
| Outcome | Odds | Winning Probability |
|---|---|---|
| Striker Wins | 1.85 | 0.60 |
| Grappler Wins | 2 | 0.40 |
Which fighter has the best value-for-money? Striker for sure!
Striker has a 60% chance of victory and 40% chance of losing. Based on the odds, a $100 bet on Striker has a 60% chance of returning a $85 profit and a 40% chance of returning a $100 loss. This can be written as:
Striker Expected Value = (0.60 * $85) – (0.40*$100) = $11
By applying the same reasoning for Grappler we get that a $100 bet has a 40% chance of returning $100 profit and a 60% chance of resulting in a $100 loss. Leading to the following value-for-money:
Grappler Expected Value = (0.40 * $100) – (0.60*$100) = $-20
The negative Expected Value (EV-) for Grappler is telling us that by taking bets like this one, in the long run we would find ourselves losing $20 for every $100 wagered. This sounds like a very bad investment idea compared with bets similar to Striker Wins: with a positive Expected Value (EV+) of $11 on average we would get a profit $11 for every $100 wagered.
The Expected Value expresses the value-for-money of a bet as the average profit that bet would return over time.
The handy formula to calculate the Expected Value of any bet expressed in decimal odds is the following:
EV = (winning probability * odds – 1) * wager
Value Betting: sniping Value Bets
A bet with positive Expected Value (EV+) is also called a Value Bet. Consistently picking EV+ bets to build and sustain profit is a strategy called Value Betting.
Value Betting for Mixed Martial Arts
Value Betting is at the core of FighterOdds.ai picks on UFC fights. Our algorithm accurately predicts fighters winning probabilities and compares them with the odds from more than 20 bookmakers in order to spot EV+ bets at the best price.
Simulating two betting machines
The powerful idea behind Value Betting is illustrated here using a statistical simulation. A series of 1000 fights is simulated with each fight having a 60% chance to end up with Striker winning and 40% Grappler winning, the offered odds are 1.85 and 2 respectively.
| Outcome | Odds | Winning Probability |
|---|---|---|
| Striker Wins | 1.85 | 0.60 |
| Grappler Wins | 2 | 0.40 |
At each iteration before revealing the outcome, “Betting Machine 1” bets $100 on Striker (the Value Bet) while “Betting Machine 2” bets $100 on Grappler. The plots below compare the evolution of the total profit of each betting machine as well as their average profit per bet.
As can be seen, after 1000 bets the betting machine 1 focused on Value Bets accumulates a profit of around $11000 while the betting machine 2 suffers a loss of more than $21000.
In sport betting picking winners every now and then is not enough to make and sustain profit over time. In order to achieve this goal, a punter must apply Value Betting to consistently pick bets offering high value-for-money.
To sum up
- The Expected Value expresses the value-for-money of a bet
- When the bet potential profit is higher than the risk, the Expected Value is positive and we found a Value Bet
- Value Betting is a strategy focused on sniping Value Bets to build and sustain profit in the long term
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