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Today’s article has been written by Kieran Ward, professional gambler, tipster and betting blogger over at www.makeyourbettingpay.co.uk
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“We have found value on a bet when we secure a price that exceeds the true probability of that outcome occurring.”

Let’s look at a very simple event to demonstrate the principle:

We are betting on a coin toss. There are two possible outcomes of a coin toss: heads comes up or tails comes up. Either of those is equally likely to occur on any one coin toss, therefore the probability for either one is 50%.

A probability of 50% expressed in fractional odds is 1/1 or even money. In decimal odds that same probability would be expressed as 2.0.

If you were to take those odds about either event occurring in a coin toss, in the long run you would break even, neither making or losing money (though in the short term you could easily come unstuck due to general variance).

In other words, at odds of even money you have no edge – and are therefore receiving no value.

Even worse than that, a bookmaker would price up either event at 10/11 (1.91) to lock in his profit margin (known as their over-round).

On average we would achieve the following results backing heads at 10/11 (1.91) for £1 a time over 1000 bets:

500 winners: +£455
500 losers: -£500
Overall P/L: -£45

Clearly not a course of action we would want to pursue!

Conversely, if we managed to find a bookmaker prepared to offer 2.1 (11/10) about either outcome in a coin toss on average we would achieve the following results:

500 winners: + £550
500 losers: – £500
Overall P/L: + £50

Much better! The second set were value bets – we were getting a price that exceeded the true probability of the event occurring! We would be very foolish not to avail ourselves of that price, repeatedly and to the largest stakes we could afford (while applying sound money management principles, of course).

Unfortunately, we are unlikely to find any bookmaker offering 11/10 about a fixed probability event such as heads coming up in a coin toss. The true probability is fixed and therefore easily calculated. (If anybody ever does find such a bookmaker, please introduce me!).

Luckily, this is not the case for all events a punter might want to assess.

Tomorrow, I will be looking at some more complex events that are much more difficult for bookmakers to price accurately – and consequently offer us far greater opportunities for finding value!

Today's Selection

4.05 Lingfield Lady Mango – each way bet – 15/2 Bet 365