How to identify value in your bets? That’s the big question. My friend, Alex Napier who operates the Best Bet Soccer website, has asked me to write this article to explain how bookmakers’ percentages are calculated and how they provide a guide to assessment of value in the odds on offer. He has asked me to look at soccer betting, where, due to the few possible outcomes (three choices – win, lose or draw) the odds offered are short in any event.
What I’ll show you is:
- how to calculate the bookmakers percentages;
- how to assess those percentages against the value in the odds;
- how to allocate your stake.
How to calculate the bookmakers’ percentages
The following data are taken from a Europa League qualifying match in July 2009 between Bangor City v Honka. The two bookmakers selected are the two that offered the best price for the draw:
Bookmaker 1
- Home win 4/1 – 20.00%;
- Draw 11/4 – 26.67%;
- Away win 8/15 – 65.22%;
- Total – 111.89%.
Bookmaker2
- Home win 11/4 – 26.67%;
- Draw 11/4 – 26.67%;
- Away win 8/11 – 57.89%;
- Total – 111.23%
Best odds
- Home win 11/4 – 26.67%;
- Draw 11/4 – 26.67%;
- Away win 8/11 – 57.89%;
- Total – 111.89%
To calculate the percentages divide 100 by the odds on offer plus one. Where the odds are A/B: 100/((A+B)/B). For example, 11/4 is 100/((11+4)/4) or 20.00%. For 11/4, we use the percentage to avoid a decimal system that might give us a more accurate percentage, but we have to accept a greater range of figures for the decimal system as being close enough. The formula for the percentage is:
Win% /round /needed
In the above table, both home win and draw are expressed percentages and rounded to the nearest whole number if necessary. The home win percentage is 100 /((100+1)/2) or 20.00% and for the draw it is 100/((100+1)/2) or 26.67%.
How to identify value
How to identify value in a bet where the odds are less than the bookmakers’ offered odds:
- Do you regard the selection as a home win or a draw? If you don’t, home win % in the denominator is not home win %.
For example, the soccer match above, if played until the end of the 90th minute the home team would score a goal at odds of 1.1. If the home team wins in the last minute, the score is equal to 0-0. All other teams score a goal. The odds for a draw are then 0.25. This is value as the bookmakers are offering less than the true odds.
- Are you content to risk more than the value of your stake? If so, you have undervalued the opponent. His chances of scoring are more, but you have not undervalued the value of your odds. Home win % and draw % will tell you how many goals either team might score. In the above table, both transfers were made up to the 90th minute. If you think both teams will score, you have undervalued the opponent, and you have undervalued your odds.
For example, in the table above, if you allow an in form goalscorer to score twice in the last stages, you will undervalue the opponent, as he is capable of scoring more than the two goals.
- Are you content to risk more than the bookmakers’ value? If so, you have overvalued the opponent, and you should switch to the other side.
- Both Home win and Draw % should be between 15% and 20%
- Between 5% and 8%
- Between 2% and 5%
- Between 1% and 3%
- 1% or 2%
- 8% or 9%
- 10%
- Over 10%
- Under 10%
Most bets, when you are making bets, you are making a gamble. Even if you are backing a favourite to win, you are Dewacasino.
This is why people go out with friends and family to the racecourse and to the casino.