You have probably clicked on this blog post as you are interested in some betting tips, more specifically, how to win at betting! If you want to win at gambling, then this blog will go through the only way sports traders, gamblers, punters or whatever you choose to call yourself can profit from a betting market in the long run.
The core principle
Everybody wants to make some money. But how can you do it? What do professional gamblers do that is different from Joe Punter and how do they do that when there are so many sharp bookmakers out there?
There really is no point going down the traditional route of going into a traditional bookmaker like a William Hill. Most bookmakers advertise great deals, but actually, the odds are stacked against you and most betting systems are deeply flawed. If you want to make a lot of money then you need to improve not only your sports betting strategy but fundamentally what you are doing and how you are staking, whether it be some detailed strategy on horse races or some newfangled football betting strategies.
If you’re looking at an online betting market or betting exchanges, the only way that you can profit in the longer term is, assuming that step one isn’t to start trading in some way, to make money by backing at betting odds that are above the implied chance of that particular event occurring. Do that repeatedly and in the longer term, you will make money. It’s a simple concept but the devil is in the detail, but let’s look at that detail.
What is the true value?
When football betting, if you can back a football team and that has a 50% chance of winning but the bookmakers give you betting odds that represent a value above that amount you will make money in the longer term, more on this later. But essentially the way that bookmakers make money is by offering the betting odds that just don’t represent value or the true chance of something happening. In order to understand that properly, you need to understand what the betting odds mean.
Whether you are trying to bet, gamble or trade for a living with a half-decent Betfair trading strategy, it’s worth knowing how to take fractional betting odds, convert them to decimal betting odds and then convert that to implied chance, so you can really understand exactly what value is or isn’t being created when you place a bet. Let’s have a look at why this is a problem for traditional punters.
Fractional odds, Decimal odds & Implied chance
The problem that most people have when they place a bet, is that they are just placing a bet to win. All that they do is stick a tenner on something because they think it’s going to win. There’s no concept of value in there whatsoever. But by understanding betting odds you will get to understand the value and therefore you will be able to place more sensible bets. So let’s get into how betting odds are constructed.
Let us say you look at a gambling market and see betting odds quoted at something like 9/4. Let’s bet a tenner at 9/4, what does 9/4 actually mean?
When you’re looking at fractional betting odds you are looking at a ratio, so if you put £4 down you will win £9 back. That’s the easiest way to understand fractional betting odds. £4 down and you get £9 back. Of course with your tenner that makes no sense because you’re going to put a tenner down, so how much will you actually get back? How much profit will you make? Effectively what you’re looking at with fractional betting odds is a ratio, so if I do 9 divided by 4 it’s a ratio 2.25 times your stake you will get returned. So if you put £100 down you’ll get 2.25 times back what you originally staked. What you’re viewing when you’re looking at fractional betting odds is essentially a ratio. All betting odds are ratios based upon how much the bookmaker is willing to pay you based upon the stake that you give him.
When you look at a betting exchange, they tend to not use fractional betting odds. However, if you move your mouse over the betting odds it will very often give you a comparison of fractional betting odds so you can actually do a direct comparison between fractional and decimal. But let’s convert a fractional to a decimal anyhow and then convert that into an implied chance. That’s the most important part of what we’re going to do.
If we look at fractional odds of 9/4 I am going to do nine divided by four, which equals 2.25. To convert it to decimal all you need to do then is add one to it, it’s that simple. So if you’re looking at betting odds of 9/4 and the ratio is 2.25 and it means the decimal betting odds will be 3.25. If you go on to the exchange that you’re going to use and you see fractional betting odds of 3.25 you can convert that back to a ratio of 3.25-1 or 2.25. You will see that this is betting odds of 9/4.
Finding value betting in a football match
So the big question is if we saw a football premier league team priced at 3.25, is its value or not? How do we identify value bets, What are the true odds? Should we place a bet?
What we are talking about here is value betting, in general of course, not any specific type of value betting.
If I do 1 divided by 3.25 that comes out at .3077. So what is that number? That number is actually a percentage. To make it easier to understand, 3.25 in decimal odds represents a 30.77% chance of this event actually going on and occurring. To get this percentage I did one divided by the decimal betting odds and when you do that you’ve got a percentage that allows you to make a judgement on whether you have a good bet. So if we’re going to place a back bet at betting odds of 3.25 we’re saying that we think the thing that we are backing has a 30.77% chance of winning. If this match was played ten times the team we want to back would win roughly three times in ten matches.
For example, if you know Manchester United are playing X team, if they played them 10 times they would win four of those games and that’s where your 40% is coming from. If you if you can come up with the reason why that is definitely going to happen, given all of the circumstances. If you think in terms of if they played this match ten times they would win four out of ten of those matches, then that would be how you come up with that 40% figure.
Once you have your figure, you can convert that 40% figure to odds and then see if those betting odds are available.
So, we think that the football team has actually got a 40% chance of winning. I’m going to do 1 divided by 0.4 which equals 2.5. What we’re saying is we think the chance of this event occurring is 40% which would mean that we’re willing to accept betting odds down to 2.50. Any betting odds below 2.50 is poor value and it becomes a lay bet. If the betting odds are above 2.50 then it becomes a back bet.
Why? Well if we look at this football match and the bet we have placed, we think it’s got a 40% chance of winning. We’ve done all of our stats and all of our maths, we’ve religiously thought through the whole thing, we’ve really focused on it and looked at it in great depth and we’ve come up to the conclusion that there’s a 40% chance of this happening. However, the bookmaker thinks there’s only a 30% chance. So if we do 40% minus that 30.77%, it comes to +9.23%. That means we actually have a 9% edge here if our maths is correct.
If our theory is correct and shows our bet has got a 40% chance and the bookmaker has got his betting odds wrong, we have some margin there. If we can back at 3.25 when we think its true betting odds should be at 2.50 we’re going to make money in the long term if we keep finding bets like this.
Finding value by flipping from a back bet to a lay bet
If we say we’re now looking at odds of 5/4 we’ll go through the same process again. So if I do the sum 5 divided by 4 and then add one to it the betting odds come out it’s 2.25. This is now saying that the market thinks there’s a 40% chance of a particular event occurring, whatever market you’re looking at. Yet we’ve said there’s a 40% chance and it’s 2.25. If we get betting odds at 2.50 or greater but something is at 5/4 the market is offering it to us at 2.25, it’s below our threshold there’s no reason that we should place the back bet in this market.
In fact, you may even want to consider placing a lay bet in this particular market because the betting odds are just so good there. So the thing you’d have to say here is that 4% margin would make me confident enough to think that my model is accurate enough. I’ve got a 4% edge in this particular market, in which case you would lay if you feel 4% is a big enough margin for error.
How exchanges can help you win
One absolutely massive way in which Betting exchanges help you achieve the impossible dream of making money from gambling is that you can ask for a price on a betting exchange. You are not restricted to taking the offered odds from a bookmaker. You can simply price up a market, convert that into odds and then simply ask for those odds. If you think you need to back at odds of 2.50 or higher, simply ask for those odds and wait for them to get matched. This is one of the reasons I got wildly enthusiastic about betting exchanges when they first launched. I knew what price I wanted and using a betting exchange I could simply place that order into the market. It was amazing!
How to win at betting in the long term
Obviously, if you want to make money in the long term on any betting market, you need a definable edge in the market and one that delivers as much margin as possible. Hopefully, I have outlined that process for you here. How you implement that it up to you. You could assess a whole range of bets to see which one has the biggest theoretical margin and then go for that particular individual bet. Perhaps you can back more than one selection using dutching to capture less individual value, but more chance of it.
If you do have an edge and you have priced the market correctly, then over time you will win money. You may not win on this particular event or the next one, but as long as you apply your bets consistently, then you will win over a long period of time. If you’ve got a definable, rational edge in the market, then you definitely will make money.