Value Betting

Since I have recently started posting bets here and on Footballelixir’s twitter account I thought it might be interesting for you to see how I approach betting. Starting with the essentials of money management, I will then show how value betting works and how you can calculate the stakes.

Money management
When you start with betting, you should at first define your bankroll. This is the total amount of money you want to use for betting and it should be an amount of money you can afford to lose. From my experience, you should keep this bankroll for a certain amount of time and not adjust it on a weekly basis. Betting is always a cycle of winning and losing. If you raise your bankroll after a win and then lose, you lose even more money. Personally, I define my bankroll before a season starts and I keep it for the whole season. The amount of money you define as bankroll determines the amount of money used for a single bet. Generally said, the amount of money placed on a single bet should not be higher than 5% of your bankroll. I am working with a more conservative approach, meaning my maximum amount of money used for a single bet equals 2.5% of my bankroll.
Maximum bet(your max amount of money for onebet should be 2.5% of your capital)e.g. 10 unitsBetting capital(your total amount of moneyavailable for betting)e.g. 400 unitsMoney Management
Probabilities to win and draw
The next step is to select a match that you want to bet on. At first, you need to calculate probabilities for both teams to win and for the game to end as a draw. This can be tricky at first, but your predictions should get sharper the more experience you gain. A cornerstone to obey is that 25% of football matches end as a draw on average, while the probability of a draw usually does not go higher than 30% (at least in my predictions). Another cornerstone is that the probability of a win of a team playing at home is on average around 48%. For my predictions, I consider a lot of influential factors on a team’s success and aggregate them to receive a value for a team’s quality in a match. After comparing the calculated values for both teams, I am then calculating the probabilities for a win of each team and the game to end as a draw. The graph below shows, how a team’s probability to win could behave from the quality of the opposing team being far inferior to even to far superior in comparison to the respective team. Logically, if a team is superior, it is more likely to win, while a draw is the most likely, if the quality of the teams is considered even. The course of the lines in the graph is interesting however, as it is not linear. While the winning percentage increases dramatically, with only a minor gap between the quality of the teams, the increase in winning percentage gets lower, the higher the difference between both teams becomes.
100%80%60%40%20%0%Team 1 strongerTeam 2 strongerProbabilities:Team 1, Team 2,Draw
Calculating your stakes
So, you are having the probabilities now, what to do next? The next step is to compare the probabilities to the odds offered by your bookmaker. You can calculate these by dividing 1 / odd on an event. After that, you can calculate the margin between your probabilities and the ones of the bookmaker. If your probability on the outcome of a specific match is higher than the probability of the bookmaker, you can bet on it. If it is similar or lower, you should not bet on it. The positive margin between your calculated probabilites and the probabilites of the bookmaker is what you actually call “value”. By doing this, you can calculate your stakes on a bet as well. Simply put: The higher the margin is, the more money you should bet on it. From my experience, the highest possible margin is 30%, which I would see as the maximum bet. Let us look at an example:
2/102/1072%12%16%1.1615.349.82XReal MadridValenciaCalculating stakes
Last Sunday, on the second matchday of LaLiga, Real played at home against Valencia. As usual, Real were huge favorites among bookmakers with odds around 1.16, but did not manage to win at the end with the game resulting in a 2-2 draw. Looking at the above posted graph of probabilites of a game result we can see, that the probability of a draw is rarely below 10%, which equals 1 / 9.82. As an experienced bettor, you might have said that Real is not as strong as the odds suggest playing against a decent Valenica squad without their star players Ronaldo and Ramos. Let us say you rated the probability of a draw at 16% and the probability of an away win at 12%. Both predictions would mean a respective 6% difference compared to the odds. As we stated before, the maximum bet (10 units) is at 30% difference, meaning for every 3% difference I am betting a unit. The 6% difference therefore results in a bet of 2 units on both outcomes.

Contrary to bets that are based on intuition, value betting forces you to calculate your own probabilities of a match’s outcome and to compare it with the bookmaker odds. It certainly helps to establish a consistent stake/money management and it might improve your predictions as well. It is a promising and lucrative method which will be used entirely for the bets posted on Footballelixir and its twitter account.