You have a favorite team. You know they are mathematically superior to their opponent. You look at the odds and they are listed at minus 200. You bet on them because they are the clear winner. They win the game. You collect a small profit.
You feel satisfied that you picked the winner correctly.
But what if I told you that picking the winner of the game is not the goal of sports betting? What if I told you that by betting on that minus 200 favorite you likely made a bad investment?
The core concept that separates a professional bettor from a casual gambler is Expected Value or EV. This is the single most important metric in sports investing and it has absolutely nothing to do with who wins the game.
EV is the precise dollar amount you are expected to win or lose on average every time you place a specific wager over the long term. If a bet has positive Expected Value (+EV) it is a good bet; regardless of the outcome. If a bet has negative Expected Value (EV) it is a bad bet; regardless of the outcome.
The Coin Flip Test
To understand EV you must understand the price.
Imagine a simple coin flip. The probability of landing on heads is 50%.
If your friend offers you 1 to 1 odds (bet $100 to win $100) on heads the EV is zero. It is a fair bet.
Now imagine a sportsbook offers you minus 110 odds (bet $110 to win $100) on that same 50/50 flip. This is a negative expected value bet. Every time you place this bet you are expected to lose money in the long run because you are paying a fee (the vig) for a 50 percent chance.
Finally imagine you find a faulty line where the sportsbook offers you plus 120 odds (bet $100 to win $120) on that 50 percent flip. This is a highly positive expected value bet. You are getting paid extra for a coin flip. Even if you lose this specific bet it is mathematically correct to place this wager every single time.
The Value Discrepancy
In sports the market is usually priced fairly but sometimes the oddsmakers make a mistake.
For example, a team might have plus 150 odds which implies the sportsbook thinks they have a 40 percent chance of winning the game.
You run your models and your analysis tells you that team actually has a 45 percent chance of winning the game.
The difference between your calculated 45 percent and the book's implied 40 percent is your edge. That edge creates the positive expected value.
This is why professionals often bet on underdogs. The minus 200 favorite is usually priced correctly or overpriced; meaning it is negative EV. The plus 150 underdog might be underpriced; meaning it offers positive EV. You are betting against the obvious winner because the price is too good to pass up.
Quantifying Your Edge
To move from guessing to investing you must quantify your edge. Our Expected Value (EV) calculator is the essential tool for this process.
You input the odds you are getting and your calculated probability of winning. The tool instantly tells you the exact dollar amount you stand to gain or lose per wager over the long term. You should only place bets that return a non zero positive dollar amount.
This method eliminates emotion entirely. You are no longer betting on who you like; you are betting on where the math provides a statistical edge.
Stop Picking Winners
The biggest hurdle is accepting that you will lose positive EV bets.
If you bet on a team with a 45 percent chance of winning you will lose 55 percent of the time. But because the payout is so high when you win the math ensures profitability over the long term. You must trust the formula even when you hit a losing streak.
In our Advanced Betting Strategy Guide we detail the methods for creating your own probability models to accurately determine your true edge.
The Investor’s Discipline
The EV principle means you should never bet on a game simply because you think you know the winner. If the odds are set at minus 400 your win probability needs to be higher than 80 percent to generate positive EV. If you cannot prove that 80 percent probability you must pass.
EV forces discipline. It forces you to shop for the best line. It forces you to ignore your gut and trust your spreadsheet.
When you view the Verified Tipster Leaderboard you are seeing experts who are successful because they never chase negative expected value. They are ruthless in their pursuit of the small, sustainable edge.
Your Next Move
Stop betting on the team you want to win and start betting on the odds you want to buy.
Calculate the EV of your next wager. If the number is negative you must pass.
If you are ready to stop gambling and start making investment decisions based on proven mathematical advantage it is time to upgrade your system.
Get Positive EV Picks that are calculated to beat the bookmaker's price every single day.