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The Way To identify value in your bets? That’s the big question. My friend, Alex Napier who operates the top 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 in the odds on offer. He has asked me to look at soccer betting, where, due to the few possible outcomes (three choices – win, lose or draw) the odds offered are short within any event.
A perfectly “balanced book” where the odds offered exactly reflect the possibility of each team winning or even the draw would produce an overall of 100.00%. Theoretically the bookmaker will profit through 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 does not seem to be much between them but as 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 offered by any person bookmaker as they would in theory be sure to lose on the event, they’re “under round” . The losing percentage would be 100.00% less the total odds percentage. Not surprisingly this does not happen. Individual bookmakers don’t offer odds on the possible outcomes that might give them a loss. What does happen, although very infrequently, is that the odds offered by a selection of bookmakers will vary to the extent that you could find a combination where those for the 3 possible outcomes are under round. It means that you can bet on all three possibilities – win, lose and draw – and provided you allocate your total stake in the correct proportion you could make a profit of the percentage by which you can bet at under round odds.
Identifying value
From the above data it’s pretty obvious that the 4 – 1 offered by bookmaker 1 in respect of the home team winning is the best price, there’s absolutely no difference within the odds offered for the draw but bookmaker 2 offers the very best odds for the away win. The question then arises, which is the best value? Obviously the 20.00% offered by bookmaker 1 on the home win will be the lowest percentage so could possibly be the best value, but this is too simplistic. There has to be a yardstick to measure the odds against. Which is your own assessment or your advised assessment of the opportunity of each outcome. If you give each possibility your own percentage rating you may compare this with the bookmaker odds percentage to establish where the value lies. The way you evaluate the prospects of each outcome is just not because of this article. It deserves more detailed treatment than may be given here where we are 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 also a 60% chance of an away win (where bookmaker 2 quotes a price that gives a lower percentage chance so offers value) consideration should receive to an away win bet with bookmaker 2.
Stake allocation
There may be occasions when it is necessary to allocate your stake between different outcomes. This could be the situation 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 essential to allocate the stake between them. Within the illustration below the odds have been exaggerated. It is quite seldom in reality that an under round opportunity arises though the illustration is a good online soccer one to show how you can use percentages.
It is generally obvious which bookmaker is or bookmakers are offering the very best odds. All you will need do is compare them. Identifying value is yet another matter. Due to this you’ll need to calculate the odds percentages to compare with your own, or your advised, perception or assessment of the prospects of each outcome. By comparing the available percentages with your assessment you can identify where the value lies and make your selections accordingly – and perhaps 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 usage of percentages should form an important part of your strategy in identifying value within the odds offered and leading to your betting profits.
