How Exactly To identify value in your bets? That is the big question. My friend, Alex Napier who operates the most effective Bet Soccer website, has asked me to write this article to describe how bookmakers' percentages are calculated and just how they give a guide to assessment of value within the odds on offer. He has asked me to look-at soccer betting, casino online where, because of the few possible outcomes (three choices - win, lose or draw) the odds offered are short in any event.
A perfectly "balanced book" where the odds offered exactly reflect the possibility of each team winning or even the draw would produce a total of 100.00%. Theoretically the bookmaker will profit by the total percentage on the match less 100.00%. In the above table bookmaker 1 should profit by 11.89% of turnover on the match and bookmaker 2 by 11.23%. At first sight there doesn't appear to be much between them but whenever we compare the theoretical profit of each the margin on the bookmaker 1 odds (i.e. 111.89 - 100.00 = 11.89%) is 5.84% higher than the 11.23% margin on the bookmaker 2 odds! Where the odds on offer produce a theoretical profit for the bookmaker the book is said to be "over round". The bookmaker 1 book is over round by 11.89% and the bookmaker 2 book by 11.23%.
Where the odds on offer total less than 100.00%, which never actually occurs with the odds provided by any person bookmaker as they'd in theory be sure to lose on the event, they can be "under round" . The losing percentage could be 100.00% less the total odds percentage. Not surprisingly this does not happen. Individual bookmakers do not offer odds on the possible outcomes that would give them a loss. What does happen, although very infrequently, is that the odds offered by a selection of bookmakers may vary to the extent that you could find a combination where those for the 3 possible outcomes are under round. This means you can bet on all three possibilities - win, lose and draw - and provided you allocate your total stake within the correct proportion you will make a profit of the percentage by that you just can bet at under round odds.
Identifying value
From the above data it's fairly obvious that the 4 - 1 provided by bookmaker 1 in respect of the home team winning will be the best price, there isn't any difference within the odds offered for the draw but bookmaker 2 offers the most effective odds for the away win. The question then arises, which will be the best value? Obviously the 20.00% offered by bookmaker 1 on the home win will be the lowest percentage so may be the very best value, but this is too simplistic. There must be a yardstick to measure the odds against. That is your own assessment or your advised assessment of the opportunity of each outcome. If you give each possibility your own percentage rating you can compare this with the bookmaker odds percentage to establish where the value lies. The way you evaluate the chances of each outcome isn't for this article. It deserves more in depth treatment than can be given here where we have been working with bookmakers' margins and value bets.
Assuming that the true reflection of the chances on the above mentioned match were home win 20% (bookmaker 1 had that about right and bookmaker 2 was under priced), a 20% chance of a draw (although these were the bookmakers offering the best odds on the draw they were still under priced) and a 60% chance of an away win (where bookmaker 2 quotes a price that gives a lower percentage chance so offers value) consideration should be given to an away win bet with bookmaker 2.
Stake allocation
There may be occasions when it is essential to allocate your stake between different outcomes. This might be the case where a selection of bookmakers odds produce an under round opportunity or where there's a strong reason to include 2 of the 3 possible outcomes so it's necessary to allocate the stake between them. In the illustration below the odds have been exaggerated. It is quite seldom in reality that an under round opportunity arises however the illustration is the best one to show the way to use percentages.
It is generally obvious which bookmaker is or bookmakers are offering the top odds. All you need do is compare them. Identifying value is the one other matter. For this you may need to calculate the odds percentages to compare with your own, or your advised, perception or assessment of the probability of each outcome. By comparing the available percentages with your assessment you can identify where the value lies and make your selections accordingly - and possibly now and again identify a no lose position where a selection of the odds offered by the many bookmakers produce an under round position! Disciplined use of percentages should form a major part of your strategy in identifying value within the odds offered and contributing to your betting profits.
A perfectly "balanced book" where the odds offered exactly reflect the possibility of each team winning or even the draw would produce a total of 100.00%. Theoretically the bookmaker will profit by the total percentage on the match less 100.00%. In the above table bookmaker 1 should profit by 11.89% of turnover on the match and bookmaker 2 by 11.23%. At first sight there doesn't appear to be much between them but whenever we compare the theoretical profit of each the margin on the bookmaker 1 odds (i.e. 111.89 - 100.00 = 11.89%) is 5.84% higher than the 11.23% margin on the bookmaker 2 odds! Where the odds on offer produce a theoretical profit for the bookmaker the book is said to be "over round". The bookmaker 1 book is over round by 11.89% and the bookmaker 2 book by 11.23%.
Where the odds on offer total less than 100.00%, which never actually occurs with the odds provided by any person bookmaker as they'd in theory be sure to lose on the event, they can be "under round" . The losing percentage could be 100.00% less the total odds percentage. Not surprisingly this does not happen. Individual bookmakers do not offer odds on the possible outcomes that would give them a loss. What does happen, although very infrequently, is that the odds offered by a selection of bookmakers may vary to the extent that you could find a combination where those for the 3 possible outcomes are under round. This means you can bet on all three possibilities - win, lose and draw - and provided you allocate your total stake within the correct proportion you will make a profit of the percentage by that you just can bet at under round odds.
Identifying value
From the above data it's fairly obvious that the 4 - 1 provided by bookmaker 1 in respect of the home team winning will be the best price, there isn't any difference within the odds offered for the draw but bookmaker 2 offers the most effective odds for the away win. The question then arises, which will be the best value? Obviously the 20.00% offered by bookmaker 1 on the home win will be the lowest percentage so may be the very best value, but this is too simplistic. There must be a yardstick to measure the odds against. That is your own assessment or your advised assessment of the opportunity of each outcome. If you give each possibility your own percentage rating you can compare this with the bookmaker odds percentage to establish where the value lies. The way you evaluate the chances of each outcome isn't for this article. It deserves more in depth treatment than can be given here where we have been working with bookmakers' margins and value bets.
Assuming that the true reflection of the chances on the above mentioned match were home win 20% (bookmaker 1 had that about right and bookmaker 2 was under priced), a 20% chance of a draw (although these were the bookmakers offering the best odds on the draw they were still under priced) and a 60% chance of an away win (where bookmaker 2 quotes a price that gives a lower percentage chance so offers value) consideration should be given to an away win bet with bookmaker 2.
Stake allocationThere may be occasions when it is essential to allocate your stake between different outcomes. This might be the case where a selection of bookmakers odds produce an under round opportunity or where there's a strong reason to include 2 of the 3 possible outcomes so it's necessary to allocate the stake between them. In the illustration below the odds have been exaggerated. It is quite seldom in reality that an under round opportunity arises however the illustration is the best one to show the way to use percentages.
It is generally obvious which bookmaker is or bookmakers are offering the top odds. All you need do is compare them. Identifying value is the one other matter. For this you may need to calculate the odds percentages to compare with your own, or your advised, perception or assessment of the probability of each outcome. By comparing the available percentages with your assessment you can identify where the value lies and make your selections accordingly - and possibly now and again identify a no lose position where a selection of the odds offered by the many bookmakers produce an under round position! Disciplined use of percentages should form a major part of your strategy in identifying value within the odds offered and contributing to your betting profits.