Expected Value

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Calculating the expected value of a wager is fundamental in managing your risk. Using our Odds Value Calculator, you can find the expected value of your bets by comparing projections (or the probability of the desired outcome happening) to the odds listed by sportsbooks. This is referred to as the expected value.

The formula to calculate the expected value (EV) for betting is simple:

(Amount won per bet * probability of winning) – (Amount lost per bet * probability of losing)

Let’s use a coin toss as an example of calculating the expected value. Each outcome, heads or tails has an equal probability of 50% - the odds offered on a fair market would be +100 ( or 2.0 converted to decimal odds).

This would result in an EV of 0 for either a Head or Tail - because the probability of the two outcomes is the same, so if you tossed a coin infinitely it would theoretically end up all square.

If however you were offered odds of +115 (2.15 in decimal odds) for the coin to land on heads, this is a value bet.

If you placed $10 on the coin landing on heads at +115/2.15, the EV is calculated likewise:

(11.50 X 0.5) – (10 X 0.5) = 0.75

This results in an EV of 0.75. So you would expect to make an average profit of $.75 for each $10 bet because the odds received are better than the implied odds of the coin toss. However, be aware of the margins (the ‘vig’ or hold) that sportsbooks build into their odds and factor those into the EV calculation.

If you are able to discover value bets like the example, over time, you will be profitable but it is not guaranteed. Using the fair coin-flip example, it is possible that the result could be ‘tails’ 10 or 15 times in a row.

If you consistently use this method to identify wager value, you won’t win every bet but you should have a better chance of success in the long run.