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How Exactly To identify value within 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 explain how bookmakers’ percentages are calculated and how they offer a guide to assessment of value in the odds on offer. He has asked me to look at soccer betting, where, because of 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 perhaps the draw would produce a total of 100.00%. Theoretically the bookmaker will profit by the total percentage on the match less 100.00%. Within 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 will not seem 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% as well as 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’d in theory be certain to lose on the event, they may be “under round” . The losing percentage will 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 will give them a loss. What does happen, although very infrequently, is the fact that the odds offered by a selection of bookmakers can vary greatly to the extent you could locate a combination where those for the three possible outcomes are under round. This means that you can bet on all three possibilities – win, lose and draw – and provided you allocate your total stake within the correct proportion you could make a profit of the percentage by that you 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 is the best price, there is no difference within the odds offered for the draw but bookmaker 2 offers the best online soccer odds for the away win. The question then arises, which is the greatest value? Obviously the 20.00% offered by bookmaker 1 on the home win is the lowest percentage so could be the very best value, but this really is too simplistic. There must be a yardstick to measure the odds against. That is your own assessment or your advised assessment of the chance 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. How you evaluate the prospects of each outcome is just not due to this article. It deserves more complete treatment than may be given here where we have been addressing bookmakers’ margins and value bets.
Assuming that the true reflection of the chances on the aforementioned 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 top odds on the draw they were still under priced) as well as 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’s necessary to allocate your stake between different outcomes. This could 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 three possible outcomes so it’s essential to allocate the stake between them. In the illustration below the odds happen to be exaggerated. It’s very seldom in reality that an under round opportunity arises however the illustration is an excellent one to show how you can use percentages.
It is generally obvious which bookmaker is or bookmakers are offering the top odds. All you may need do is compare them. Identifying value is another matter. Due to this you 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 may 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 provided by the various bookmakers produce an under round position! Disciplined use of percentages should form a serious part of your strategy in identifying value within the odds offered and leading to your betting profits.
