Welcome to our latest blog post where we delve into the fascinating world of betting, specifically focusing on how to calculate value in bets. This seemingly simple concept is the cornerstone of successful betting strategies and is essential for anyone looking to turn a profit in the long run.
Whether you're a seasoned bettor or just starting out, understanding the concept of 'value' in betting odds is crucial. Betting isn't just about picking winners; it's about finding opportunities where the odds offered are greater than the true likelihood of an event occurring. This is known as betting with value.
In this post, we will break down what value means in the context of betting, why it's important, and how you can use basic mathematical formulas to identify value bets. By the end of this guide, you’ll be equipped with the knowledge to make smarter, more informed betting decisions. So, let’s dive in and start mastering the art of finding value in your bets!
Vigorish
The term "vigorish," often abbreviated as "vig" and also known as "juice," "under-juice," "the take," or "the cut," is fundamental to understanding the economics of sports betting, gambling, and bookmaking. It refers to the fee or commission a bookmaker or a betting platform charges for taking a bet from a gambler.
The formula for calculating the vigorish percentage in a two-way market like a coin toss is straightforward:
where Probability₁ and Probability2 are the implied probabilities derived from the bookmaker’s odds.
The Total Implied Probability is simply Probability1+Probability2. So, we now have everything we need to solve the problem.
Synthetic Hold
The term "synthetic hold" in sports betting is a concept used to describe an adjusted measure of the bookmaker's hold based on the number of sportsbooks that a bettor has access to.
For instance, if one sportsbook balanced their action on o203 -108 and u204 -105, then they would have an expected return of 0.7% of the handle. I won't dive into the math on this one because it is a little more complicated and requires an estimated probability of each number hitting.
Synthetic hold is important as it helps bettors find arbitrage opportunities. If the synthetic hold is a negative number, then that means the bettor can play both sides of bet and either have an expected EV on a middle or a guaranteed profit on, say, a money line bet.
Euclid EV
Euclid EV is our proprietary metric that helps users find profitable bets. We cover this metric in much more detail here: Explaining Euclid EV, but the gist of this metric is that it compares the Best Line available to the bettor to the Nostradamus No-Vig which is where the line is projected to be at without vigorish.
This metric is not to be confused with EROI, which is similar but calculated slightly differently.
EROI/Edge/EV
EROI, or expected return on investment, is a metric that has a much more functional use compared to the Euclid EV.
To calculate the expected Edge of a bet, one simply multiplies the Bet Amount * EROI. If a bettor placed a bet of $100 in the scenario above, then their expected EV on that bet would be $2.11. If they bet $200, it would be $4.22 and so on.
Ultimately, EROI (and consequently Edge) are the most important factors in finding profitable bets over the long term.
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