Basic terms and concepts
Odds and Probability Estimate
Odds are the reciprocal of probability. For example, in a coin toss the probability for heads vs. tails is 50 percent for each, if the coin is flawless. Therefore the correct odds for both outcomes is 1/0,5 = 2. The Bookmakers takes a small margin for themselves as reward, and thus the odds in an even betting event could be 1,95 and 1,95. The probability estimate, which is compared to the available odds and is the basis for investment decisions, is based on a database of thousands of similar kinds of betting events. After all, the most important aspect of sports betting is the level of professional skill – the ability to filter the essential from huge mass of information and the ability to convert that information into numbers with methods that can be repeated over and over again. To simplify this process – the probability estimate is the outcome of comparison between the skill level of teams, or athletes, with relevant information about conditions, motivation factors, schedules and line up information. Calculating probabilities is not exact science, and even after the match or competition has ended, we cannot say for sure whether the estimate was right or wrong. There is a quite a lot of humane randomness in sports due to inconsistent conditions. We can nevertheless investigate the profitability of our probability estimates when we compare our estimates to a significant number of results.
We recommend investing in a sporting event when the offered odds are high in relation to the probability estimate. Everything is about the odds! The offered odds can go lower than the level of our betting recommendations – if this happens then an investment should not be made. New betting possibilities come forward all the time, so the bettor has a noteworthy edge over the booksmaker by simply investing in events which have a positive return of investment, and where ambiguous factors, such as analysis risks and market risks, are small.
It is absolutely vital to follow the progress of investments. Value Bets Track Record gives guidelines for success, but the progress of the customers’ own bankroll depends on the available odds and the chosen stake level. We recommend, and moreover insist, that our customers keep a betting bankroll, from which the stakes are deducted and to where the winnings are added. The size of the bankroll should not affect everyday life, the money in the bankroll should be surplus money that can be dedicated to investment purposes. When the bankroll decreases the stakes will be reduced, and similarly, after success and the bankroll has increased, the stakes will be moderately raised. In practice, a very small share of the bankroll is being invested daily, so there is no need to keep the whole bankroll on bookmakers accounts.
The expected return on investment and staking
When the probability of an event is 50 percent, then the correct odds for that result is 2.00. All the odds above that are worth investing in, or worth ”buying”. The expected return of investment is simply calculated by the multiplication of probability and available odds, for example 0.5 times 2,1 is 1.05. This kind of a bet will grow your invested stake five percent in the long run. In our betting recommendations the maximum stake, which is seldom used, is 2 percent. Most of our recommendations are approximately one percent of the customer’s bankroll, for a single investment. Our staking recommendations are based on Kelly’s formula. In Kelly’s formula the percentual stake of the bankroll is calculated in following manner:
Kelly’s formula expects exact probabilities in order to maximise the growth rate of the bankroll. Because the probability estimate of an event always gives the highest possible estimate, we recommend that our customers use Kelly’s formula with a divider to limit stakes. For example, Kelly’s formula divided by eight is a safe way to limit the size of stakes during losing periods.
The Sports Betting Market
Why invest in sports betting?
It is possible to earn a daily living from sports betting, but this requires hard work using research methods that can be repeated in multiple situations. With professional guidance, sports betting can at least be a nice extra income. Our point of view sees sports betting as first and foremost, part of a rationally divided investment scheme along side others such as poker and the stock market.
The Sports Betting Market Today
The sports betting market is constantly growing. Between the years 2001 and 2013, the sports betting industry has, on average, increased 5,4 percent annually (European Gaming & Betting Association, 2015). The estimate for the annual turnover in 2015, in the European gambling industry, is over 70 billion euros. The turnover in sports betting is larger than in poker or in casino games.
The betting turnover in the most popular football league matches has reached such a high level, that bookmakers who welcome winning sports bettors, are able to accept significant stakes. On the other hand, some of the sporting events are merely marketing tools for the bookmakers. Although they have plenty of odds available, the stakes that bookmakers accept for these events are too small for any rational investment business.
It is possible to have a bet on almost anything nowadays, but chances of making profit lie in the major leagues, where the liquidity of the betting market sustains significant stakes. The enormous betting market offers the possibility of making an income for tens, or maybe even hundreds of bettors, even when they all submit their bets with same probability estimations, as well as with large stakes.
How the betting market behaves?
Betting market has changed completely since the early 2000’s. Information spreads in seconds through the internet and at the same time the odds react to this information. This is a natural development and it removes certain simple regularities and chances for a quick profit. For the active bettor, there is actually too much information and data available, and therefore, market reactions are sometimes surprising. For this reason, the betting market is less predictable than before. Decades of experience in the industry along with updated market research and market knowledge enables us to have a significant advantage in the market.
When bookmakers open new betting events, the stake limits are modest but will grow as more betting money is invested in events. Odds are also in constant motion, seeking a balance from all the possible available information. Early lines set by bookmakers continuously offer extremely tempting investment opportunities. We will publish our betting recommendations as soon as we think the stake limits are high enough to benefit our customers.
Risks and reliable operators
Nowadays, the greatest threat for competitive sports is match fixing, which is the criminal manipulation of sporting events for a financial profit. For our part, we have been active in revealing these cases and we will continue to work against criminal activities in the betting world. Match fixing involves only an extremely small part of all sporting events, but the effect of this on the profit of a sports betting investor can be dramatic if the market analysis alert signals are not responded to. This problem cannot be completely eliminated but thanks to a new monitoring system the situation is looking much more positive than a few years ago.
Our Value Bets track Record includes the odds from Pinnacle Sports, SBOBET and Veikkaus. We do not co-operate with other bookmakers and we recommend always taking the best available odds. Experience tells us that many popular bookmakers will quickly set a low staking limit for winning bettors. This problem has never occured with the bookmakers named above. The best and the biggest bookmakers accept ”smart money” from winning bettors, because it increases the betting turnover, raises the staking limits and makes it easier for the bookmaker to balance their odds.