How to Calculate Expected Value (EV)?
Now that you know what does EV mean in betting, let’s discuss how you can calculate it!
The formula for calculating the expected value (EV) is:
EV = (Probability of winning x amount won per bet) – (Probability of losing x amount lost per bet)
The first step to calculating EV in sports betting is determining the winning probability. It is the likelihood of your bet winning. You can express it as a percentage of decimal. For example, the probability is 0.60 if you believe a 60% chance of winning. Next, determine the amount won per bet. For example, if you bet AED 10 and the odds are 2.0, you would win AED 20, including your initial AED 10 stake. So, the profit is AED 10.
Similarly, determine the probability of losing by simply 1 minus the probability of winning. For instance, if the probability of winning is 0.60, the likelihood of losing is 0.40. Determine the amount lost per bet. It is the amount you lose if your bet does not win. Usually, this is the amount you staked (AED 10). Now, enter the values into the formula:
EV = (0.60 x 10) – (0.40 x 10)
EV = 6 – 4 = 2
So, the expected value (EV) of this bet is AED 2. Thus, you can expect to win AED 2 for every AED 10 bet you place under these conditions.
Positive and Negative EV
| Positive EV | Negative EV |
| It is profitable in the long run | Unprofitable in the long run |
| Higher probability of winning | There is a lower probability of winning. |
| It indicates the value of the bet | No value |
| It encourages strategic betting | It leads to potential losses |
How to Identify Positive and Negative EV Bets?
Let me discuss identifying positive EV bets with you. I will consider horse racing as an example. Analyze the odds the online sports betting site offers and compare them with your calculated probability of the horse winning. If the odds indicate a lower likelihood than your calculation, it is a positive EV bet. Next, calculate the EV using the formula above.
In addition, look for market inefficiencies where the market may have undervalued a horse due to a lack of information about the horse’s recent performance. Monitor line movements. If the odds are in your favor after placing the bet, it often indicates a positive EV.
Compare the odds and probabilities to identify negative EV bets. You will have a negative EV bet if the odds imply a higher probability than your calculation. Use the formula to calculate the expected value.
Avoid betting on popular horses because they usually have a negative EV due to inflated odds caused by public betting.
How to Use EV to Make Informed Bets?
Expected value (EV) is important in sports betting, including football betting. It helps you identify profitable bets over time. Focusing on EVs allows you to make smarter decisions and prevent the risk of losses. Let’s consider a realistic scenario. If you believe the French football team has a 60% chance of winning and the odds are 2.0, the EV calculation will show a positive value. So, this indicates a good bet. Monitoring line movements and market inefficiencies can help you identify positive EV bets in football betting.
Factors Affecting EV
Factors affecting EV are:
- Odds offered by sportsbook
- Probability of outcomes
- Market movements and their impact on the EV
Odds Offered by Sportsbook
The odds provided by the sportsbook are important for determining the EV of a bet. These odds reflect the betting site’s assessment of the likelihood of an outcome. For example, in cricket betting, if a sportsbook offers odds of 3.0 for Pakistan to win, it implies a 33.33% chance of winning. However, if your analysis suggests a 40% chance, the bet has a positive EV.
Probability of Outcomes
The probability of an outcome means you estimate how likely an event will occur. Accurate assessments are important for calculating the EV. For instance, in boxing betting, if you believe a boxer has a 70% chance of winning but the odds imply only a 50% chance, this discrepancy indicates a positive EV bet.
Market Movements
Market movements, such as changes in odds due to real-time information or betting volume, can impact the EV. For example, if the odds for a cricket match shift from 2.5 to 2.0, the EV of a bet placed at the original odds may change.
Monitoring these movements allows bettors to make timely and profitable bets. If you place a bet on Pakistan at odds of 2.5 using payment methods like credit cards or e-wallets, and the odds later drop to 2.0, your bet’s EV might increase, indicating a SMART bet.
Final Words About EV in Sports Betting
Understanding and applying the EV is essential for making informed and profitable bets in sports. Analyze odds, calculate probabilities, and monitor market movements. That way, you can identify positive EV opportunities.
