What is Positive EV Betting?
You may have seen or heard the term Positive EV Betting before, maybe on a betting site or mentioned on Twitter, but what exactly does positive EV betting mean?
The abbreviation ‘EV‘ stands for Expected Value. Expected Value is the theoretical amount you would win or lose from each bet if you could make that same bet an infinite number of times and take the difference between all the winnings and losses incurred.
Positive Expected Value (EV) Betting, also known as Value Betting, is a strategy employed by sharp bettors to profit from identifying mistakes in sportsbook odds. Over a large number of bets, the expected total winnings, considering both the probability and potential payout, are higher than the total expected losses.
Okay, don’t worry if you didn’t quite understand that completely. We’re going to break the Positive Ev Betting strategy down with a couple of examples.
Understanding Expected Value in Betting
To help us understand expected value we are going to use the example of a betting market for the outcome of a coin toss.
Assuming that the coin is fair the probability that the coin will land on heads is 50%. As a result, the probability that the coin will land on tails is 50%.
If we convert these probabilities to moneyline odds using an odds converter. We get the odds of +100 for both sides of the coin. This is called the no vig odds or true odds of a coin toss.
If we bet $100 on the coin landing heads, we would win $100. If the coin lands tail we would lose $100. We can’t know the outcome of the coin toss before it happens.
However, we know that over a large volume of coin flips (i.e. 10,000) the coin will land heads about 5000 times and the coin will land tails about 5000 times.
If we continued to bet on heads throughout the 10,000 flips then we would win around $500,000 in total from winning bets. Whilst losing about $500,000 in total from all the losing bets. The means that we would be close to breakeven.
Now let’s say for a promotion DraftKings are offering boosted odds of +110 on heads for each coin toss before this season’s NFL games. The odds for tails are -110. The odds of the coin landing heads and tails remain the same so our chances of winning a bet on heads are still 50%.
A bet on heads would be a positive EV bet. As the odds offered by the sportsbooks are larger than the true odds for the outcome. In this case +100 for the coin landing on heads.
Let’s say we bet $100 on each coin toss for the whole NFL season. In total, there are 272 games and we expect around 136 to land heads and around 136 to land tails.
We will lose $13,600 from all the time the coin lands tails. However, each time the coin lands heads we win $110. So, our expected winnings would total $110 x 136 which is $14,960 making a net profit between all the wins and losses of $1360.
We can calculate how much we made on average per game by dividing the net profit by the total number of games (272 games). In this case, we made about $5 per bet. This figure is the expected value of the bet and is the key component for answering ‘What is positive ev betting?’
Calculating Expected Value for Betting
We can summarize the above process with the following mathematical formula:
Expected Value = (Bet Stake x True Probability of the Bet Winning) – (Bet Stake x True Probability of the Bet Losing)
It’s this basic formula that powers our expected value calculator.
Now you may have caught on to the fact that finding the true probability of a coin flip is rather easy. How on earth do you find the true probability of sports teams and players winning? Do we just have to go with our gut like your run-of-the-mill sports bettors?
Thankfully, we can employ the use of statistics and probability theory to make informed decisions about the underlying true odds within the betting markets.
How to Calculate the True Odds for a Market.
An important concept when finding the true market odds and calculating expected value bets is the concept of ‘Wisdom of the Crowds‘
Wisdom of the Crowds refers to the phenomenon where the collective opinions and insights of a diverse group of people lead to more accurate predictions than those of individual experts.
In the context of betting, this concept suggests that aggregating the opinions of a large and diverse group of sportsbook odds can result in more accurate predictions. By considering a wide range of perspectives, the collective wisdom tends to outperform individual predictions, contributing to better-informed betting decisions.
When a sportsbook sets betting lines they use their current estimate/opinion of the true odds.
They then apply what’s called a ‘vig‘ to those true odds. This is when they reduce the odds to create negative EV betting opportunities so that the sportsbook profits in the long run.
For us to be able to use the ‘Wisdom of the Crowds‘ method to infer the true odds. First, we need to remove the vig or ‘De-Vig‘ the odds offered by each sportsbook. There are betting calculators that can do this for us such as the ‘No Vig Calculator‘.
There are simple devigging methods such as the additive method which evenly distributes the vig back to the odds of each outcome. However, there are more advanced methods such as the ‘Shin Method‘ which tries to account for what’s called ‘Favorite-Longshot Bias‘ and ‘Insider Trading Bias‘.
Once the sportsbook odds have been devigged we could just take an average between all of the sportsbooks to infer the true odds. However, some sportsbooks are better at setting odds than others. There are two main categories of sportsbooks ‘Soft Books‘ and ‘Sharp Books‘. Soft books limit winning players whilst ‘Sharp Books‘ don’t restrict winners. Naturally, sharp book odds are more accurate and update faster than soft books.
As a result, we want to apply a heavier weighting to odds from sharp books and less to odds from soft books.
How do we Manage Our Risk?
Unlike some risk-free betting strategies such as arbitrage betting or matched betting. Positive EV betting does not guarantee a profit for every bet but only after placing a large volume of bets can we be confident that we will see a return.
In our coin toss example where we bet $100 at odds of 110. After 10 flips we have around 62.3% chance of ending in a profit. However, after 10,00 flips we have a 93.1% chance of being in profit
If the odds for heads were increased to +120 then after 10 flips we still have a 62.3% chance of ending in a profit, but now after 1000 flips we have a 99.84% chance to end in a profit. By 10,000 the chance of a loss is near impossible.
The larger the probability gap between the bookmaker’s odds and the true odds the more likely we are to turn a profit sooner. How do we know how much we should bet? To grow your bankroll at the fastest rate with the minimum risk of loss we should use a method called ‘Kelly Criterion Staking‘.
Kelly Criterion Explained
Kelly Criterion is a bet staking method which calculates the optimal bet stake given three factors:
- The size of your bankroll
- The sports betting odds
- The probability gap between the sportsbook odds and the true odds
Optimal Bet Stake = (((Decimal Odds – 1) x (Win Probability)) – Loss Probability) / (Decimal Odds – 1)
Most positive ev betting tools will calculate the optimal stake for you using the Kelly Criterion. When placing bets you can opt to bet at the full Kelly bet stake, bet at half kelly or quarter Kelly depending on your risk tolerance.
How Do We Find Positive Ev Bets
Although, it is possible to find positive ev bets manually using a free odds shopping tool or an odds comparison tool. It can be incredibly time-consuming scanning the odds and punching the data into a number of odds calculator and betting calculators to find profitable bets.
You will make far more money by automating the process of finding positive ev bets. You can either do this yourself by creating your own betting tools or you can subscribe to a premium positive ev betting tool such as Oddsjam or RebelBetting which will find profitable bets for you 24/7.
Positive EV Betting Software
If you want to make some serious money from sports betting you need to be utilizing software tools that can analyze large quantities of data as fast as possible. Sportsbook odds are constantly moving and changing.
Often positive ev bets will only be available for a few minutes before a sportsbook adjusts their odds. This is why speed is so important in the betting world.
There are several options for betting tools to help you find positive ev bets. Oddsjam and Unabated are the best options for North American sports bettors and RebelBetting and Trademate Sports are better for European Sports Bettors
Oddsjam
Oddsjam is the largest sports betting software tools website in North America. They have by far the widest coverage in terms of sportsbook odds along with providing near real-time odds updates for nearly all sportsbooks.
Below is their current coverage of sportsbook
Their Positive EV Package include access to their Positive EV Bets tool along with access to their arbitrage betting tool.
I cover both of these tool in my Oddsjam Review.
The Positive Ev Package subscription cost $199.99 per month. You can try the software for free with their 7-day free trail. I’ve linked this bleow.
Unabated
Unabated was created by long terms professional sports bettors Rufus Peabody and Jack Andrews.
Unabated are Oddsjam’s main competitor. Unlike Oddsjam that are the swiss army knife of sports betting tools, Unabated focuses solely on advanced postive ev betting strategies.
Unabated have their ‘Edge Rushers’ tool which provides you a constant stream of positive EV bets similar to the Oddsjam positive ev bets tools.
However, Unabated go a step further by providing you with a suite of powerful simulation tools and educational courses to find value at the sharp sportsbooks and betting exchanges. Which ultimately won’t restrict you for winning.
RebelBetting
RebelBetting was one of the first sports betting software tools on the web back in 2007. They are the go to arbitrage and value betting software tool in Europe and the rest of the world.
You can see a list of sportsbooks they support by country in the following spreadsheet
TradeMate Sports
TradeMate Sport is another arbitrage and value betting tool for the European market. Built by former professional poker player, software developer and Engineer.
The TradeMate software covers over 90+ sportsbooks in their core version.
The TradeMate Pro version also includes access to betting Exchanges and Asian Sportsbooks via their broker SportMarket. Check out their video below.
Positive EV Betting vs. Arbitrage Betting
If you’re unaware of the arbitrage betting strategy check out my article on: What is Arbitrage Betting?
If you’re familiar with arbitrage betting let’s compare both strategies and weigh up the pros and cons of each.
The obvious advantage of arbitrage betting is that when done correctly you should profit from every arbitrage bet. Whilst the positive ev betting strategy requires you to grind through the variance before your profit/loss converges on the expected value often going through losing streaks which can be demoralizing.
So why not just always hedge out a positive ev bet to create a ‘risk-free‘ arbitrage bet? Well, there are two reasons:
Often positive ev bets will be in markets where the vig can be large enough that an arb cannot be created such as college football odds or college basketball odds. Alternatively, a positive ev bet may be in a betting market that is very hard to hedge such as a player props market.
Often we make less long-term profit by arbing a bet when that bet could have been taken as a single positive ev bet. This is because many arbitrage bets consist of one positive ev bet and one negative ev hedge bet. In most cases, we trade off some of the value to remove the variance and lock in a profit.
Another advantage of positive ev betting over arbitrage betting is speed. With positive ev betting we only need to place a single bet. We either get the bet placed or we don’t. Once the bet is placed we can forget about it and move onto the next bet.
However, with arbitrage betting, we need to navigate to a second sportsbook and place our hedge bet. This always comes with the risk of the odds moving against us, the bet not getting accepted, stake limits and many other unforeseen problems.
This is why positive ev betting is my personal preference when betting in-play during live games.
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