How to calculate expected value - tips by bettingroom.co.uk
Do you want to bet more wisely for a chance of making a profit from betting? Then it’s essential to learn about expected value so you can truly determine whether a bet is worth placing or not. Learn all about value here at bettingroom.co.uk before joining one of our recommended sportsbook sites.
Expected Value explained by bettingroom.co.uk
A bet’s expected value indicates how much we can expect to win for each bet, and can be calculated by means of a simple equation. This involves multiplying the probability of winning with the amount you get if you win your bet, and subtracting the probability of losing multiplied by the amount lost for each bet. Follow the below steps in order to calculate this now:
- Find the decimal odds for each outcome on the sportsbook site. Below we've taken one example:
- Team A win – 1.32
- Team B win – 13.5
- Draw – 5.2
- Multiply your stake by the decimal odds, then subtract the stake in order to determine your potential winnings (£10 * 1.32) - £10 = £3.20
- Divide 1 by the odds of the outcome to calculate its probability (1/ 1.32 = 0.757 in this case, or 76% probability for Team A to win).
If this is a football match, the probability of a Team A win not occurring is the sum of Team B’s win plus a draw; that’s 0.074 + 0.192 = 0.266. Your formula will now look like this:
(Probability of Winning) x (Amount Won per bet) – (Probability of losing) x (Amount lost per bet)
(0.757 x £3.20) – (0.266 x £10) = - £0.24
This is a bet with a negative EV, which suggests that you will lose £0.24 on average for every £10 you stake! The operator has done his homework and has incorporated a low margin in order to gain the upper hand. However, this doesn’t necessarily mean that you’re going to lose money; if in your opinion the probability differs from the one implied in the odds, then you could find a positive expected value.
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Needless to say, it can take a while before you get used to avoiding common mistakes and become specialized in a specific area of betting. However, all our recommended betting sites have welcome offers for their new customers, which enable you to get your lost money back on your first bet, as well as plenty of other cashback and free bet offers to minimize your losses. Take advantage of one of these by clicking on the links to our recommended sportsbook sites and maximize your profits with bettingroom.co.uk!
