Profit in Gambling Through Value 2

Bias in Betting and Prediction Markets

Value Betting Strategy Part 2: Specializing and Beating Sportsbooks at their own Game

This is the second in a 3-part series focusing on value betting. You can read the first part here. This week I cover specializing and then explain how you can form your own book and use it to grab an edge.

Profit in Gambling Through Value: How do I Beat the Sportsbooks by Specializing?

Consider how a sportsbook is staffed.

As well as the many people running the operation, they’ll have a team of odds compilers. Their role is calculating the odds / lines for every event.

The sportsbook will want to concentrate their efforts on markets where they have the most money coming in (and therefore the most profit to be made). Most of the staff will be working on major leagues, especially the NFL.

Then consider some of the smaller markets. Depending on the size of the sportsbook they may have just one person covering a sport. For smaller leagues within smaller markets, there may be one person covering multiple sports. As they are smaller markets, the book is not going to make a lot of money in this market. Conversely, they are not going to take much of a hit either. This means less time and diligence in making sure that the lines are accurate.

Finding Value Bets is Proportionally Easier in Smaller / Niche Markets

As a gambler you can take advantage of this situation simply by specializing in a certain sport and beating the sportsbooks that way.

Here is an example from UK soccer, though the principles are the same for any sport:

You study hard and become an expert in lower league soccer. Specifically, the ‘Conference South League’ in England. You attend games regularly and you know exactly how well many teams are playing. You keep up to date on the player injury situation for the key teams, and you regularly post in and read a non-league forum.

How will a sportsbook look at these markets? Will they have people going to games, and have the same knowledge level as you? I very much doubt it. They will use a combination of the league table, squad information, and current form to set their odds.

Who has the edge here? You do. Potentially a big edge. As the expert, you can spot value betting opportunities. You don’t need to hand an EV edge to the sportsbook after they accurately price a market.

The Opposite of Finding Value: Example from the EPL

Now consider a slightly different situation. You have great knowledge of the English Premier League. Like the Conference South expert, you know everything about it.

This situation is completely different, as your expertise here will be matched by the Sportsbook. They take more money on this market than any other in soccer, so they will spend a lot of time and resources making sure the lines are correct.

If you have any edge here, it will be a tiny one.

Beating the Sportsbook by Making Your Own Book: How to Find Value Opportunities

It’s all very nice being an expert in a specific sport or league, but how do you turn it to your advantage?

The best way is to make your own book on an event. You can then compare it to the sportsbooks odds, locating places where there is a gap (and so long-term value).

Here is an example of how you do this:

There is a game this afternoon in the Conference South. Dover is playing at home to Staines Town. Having spent some time considering all the aspects of the game, you conclude that the chances of each outcome are as follows:

Dover win       50%

Draw                30%

Staines win     20%

Having worked out the probabilities, you need to change these outcomes into odds. We do this by simply dividing 100 by each probability.

Dover win       100% / 50% = 2.00

Draw                100% / 30% = 3.33

Staines win     100% / 20% = 5.00

Then our next step is to compare the odds we have to the odds of the sportsbook

Dover win       2.00 Bookmakers odds are 1.83

Draw                3.33 Bookmakers odds are 3.60

Staines win     5.00 Bookmakers odds are 3.75

Here, as you can see, you are being offered shorter odds on both Dover and Staines Town winning than you had worked out.

You want to back Dover at 2.00 or above, and Staines at 5.00 and above. In both cases the book is offering you lower odds, so you leave these two outcomes alone. However, when it comes to the draw, you consider the fair odds to be 3.33, yet the sportsbook is offering you 3.6.

Here you are gaining value, so on this market the draw should be your bet. Remember, you’re the expert here, so back your own judgment, and beat the bookies at their own game.

Of course, you’ll lose this bet more often than you win. The key is to imaging making this same bet 100+ times. With a value edge, your bet is a positive expected value one and you will win money in the long run. Make +ev bets, with a bankroll large enough to withstand the variance and you have a profitable Value betting system.

Calculating Value for Different Sporting Events

This system works for any event, simply calculate the percentage chance for every outcome. There are just two outcomes for many sports, or over a hundred in a golf tournament, though the calculation is the same. You then convert the probabilities to odds and then compare them to the actual odds. If you are gaining value, then go ahead and back it.

Profit in Gambling through Value: Part 2 Overview

Part 2 of my value betting guide showed how specializing in a sport can be advantageous to your betting, and how to form your own odds on a market. Part 3 looks at bankroll management and staking systems that are critical to make sure you can maximize that edge.

Once you have understood the concepts of value betting and different ways to give yourself an edge, it is time to find ways of maximizing your profits. Prediction Market betting offers many possibilities for the advanced bettor. Here is a selection of the detailed guides you will find here at High Tech Gambling.