Basic information about sports betting

Probability estimation

The probability estimation is used to describe the probability of something happening. For example for a football match ManU-Charlton the probability estimates for the home team winning, for a tie, or for the away team winning could be 50%- 28%- 22%. (Total 100%)

Odds

The odds is the reverse number of the probability estimation. In our example the odds would be 1/0,50=2,00 (home team winning), 1/0,28=3,57 (a tie) and 1/0,22= 4,55 ( away team winning).

Deduction and return percentage

Bookmakers don’t sell odds to their customers with a 100% return. Instead, they try to win a part of the trade for the match for themselves. For example, the return percentage of the Finnish bookmaker Veikkaus is 88% in Pitkäveto and the deduction 12%.

In the international markets the percentages usually vary between 90%-97%, depending on the bookmaker, match and the type of the bet. The bet exchanges the may offer a return percentage of even 100%, but this does not take the possible commissions into account.

Value bet and Value margin

Betting the value bets is the foundation for profitable betting. A player should always bet on the value bets, since in the long run, a player can win only by betting on the value bets.

Let’s assume that you have calculated the following probabilities for ManU-Charlton: 50%- 28%-22%. Value margins for these probabilities are 2,00 – 3,57 – 4,55 (100/probability estimation). If a higher odds than value margin is available for some of the results, you are looking at a value bet. For example, if you can get better odds than 2,00 for ManU victory, it is then a value bet and all odds under 2,00 are underprices.

Value

You can count the value of a match in a following way: Odds you can get/ marginal odds. If, for example, you could bet that ManU wins and the odds for that are 2,25, the value would be: 2,25/2,00*100=112,50%. In the long run you could expect to profit from this kind of games 12,50% each time.

Account

A player should always establish himself a separate account from which he will make his bets. The amount to be put on the account depends on the player. It should however contain enough cash to last through occasional losing streams. You should remember, that a bet is lost until the result has been confirmed.

Placing your bet

If you want to profit from your betting, then setting the right kind of stakes and bets is essential. You should not put down the same stake to every match, because the odds and the probabilities affect to each stake individually. By using the Kelly formula you can find out the optimal stake for each bet, and the account growth will be maximized. When using a higher Kelly divider the growth of the account will slow down, but the risks will be lower. The best match will always be played from the starting account, the next best from the amount left on the account etc.

Using the Kelly formula you can calculate the optimal stake in a following way:

S=(P*K-1)/ (K-1)

S= optimal stake from the account

P= The player’s probability estimation

K= The odds given by the bookmaker

Example: If in the example above you would get a 2,20 odds on ManU winning, the optimal stake would be:

                        S=(0,5*2,20-1)/ (2,20-1)

                        S= 0,083= 8,3% of the account

Often it is however wise to use the Kelly divider, with which you can set your own risk taking and diminish the swaying of the account. The account will grow by using the Kelly divider, although the growth will be slower. Usually the Kelly divider is between 4 and 10. We’ll use 4 in the example.

                        S=(0,50*2,20-1)/ (2,20-1)/4

                        S=0,083/4

                        S=0,021= 2,1% of the account

Circulation Ratio

The validity of the probability estimations and the circulation ratio of the account will resolve how much a player will win in the long run. If a player will bet only on the underdogs with high odds and values he will surely end up winning, but relatively slowly. A player who is willing to bet on the more even matches, he will no doubt get a better result, since the amount of matches played and the circulation ratio of the account will be higher.

Various games

Match odds  (1x2- betting)

In the traditional 1x2- betting you bet on the right result, which is on home team’s victory (1), tie (x), or the away team to win (2). The best game alternatives are usually found among the underdogs or the more unknown series, which the bookmaker is lacking information or knowledge of. The traditional bookmakers usually have a return percentage of 90%-95% in the 1x2- betting, but in the bet exchanges the percentage can be up to 100%. The bet exchanges do however take a commission on the bet, so the true return percentage is slightly lower.

On the game list the odds are usually given in the following way:

            Birmingham – Charlton             2,70 – 3,30 – 2,80

If Birmingham wins the match, those who have bet on it will get back their stake multiplied by the odds, 2,70. If the stake is 100 credits, the profit will be 100*2,70= 270 credits. The net profit will be 270-100= 170 credits. Those who bet their money on a tie- result or away team’s victory (x or 2) will lose their bets.

This applies to all the games

Totals – Under / Over

In Totals- bets the bookmaker will set a marginal amount for goals in a match and the player will bet on if there will be more or less goals in the match than the marginal amount of goals set for the match. In soccer the marginal amount is often 2,5 and in ice-hockey 4,5 or 5,5 goals.

If the marginal amount of goals for a football match is that 2,5, then under- result means that there should be scored a maximum of two goals in the match. Under- results would then be 0-0, 1-0, 0-1, 1-1, 2-0, 0-2. All other results will be Over- results, because in that case there have been scored more than 2,5 goals in the match.

The marginal amount of goals in a football match can also be an even amount of goals, for example 2,3 or 4 goals. If the match ends in the same result as the marginal amount of goals, for example if the marginal amount is 3, and the match ends 1-2, 2-1, 3-0 or 0-3, then the stakes will be returned. In case of other results, either the bookmaker or the player will win.

In other sports than soccer (European football) the principals are the same. You should however make sure whether the goals scored on over-time are included to the bet or not. The rules may differ depending on the bookmaker.