Since I spoke briefly in the last blog about probability, it felt a good time to explore that further.
Probability is essentially how likely something is to happen, so any time you’re getting odds greater than this apparent likelihood you are getting value on the bet.
Implied Probability is a little different however. It is effectively odds converted into percentages including the bookies margin. To work this out simply divide 1 by the decimal odds and then multiply by 100. For example if two teams are playing a game of Basketball and one is priced up at 1.43 and the other 2.65 the favourites implied probability is 69.93% (1 divided by 1.43 = 0.6993007 x by 100 = 69.930069) and the outsiders probability is 37.73% (1 divided by 2.65 = 0.37735849 x by 100 = 37.7358491) now this adds up to a total of 107.66% which indicates that in this particular game the bookie has a 7.66% overround or “margin”.
This differs to True Win Rates or Actual Probability as they depict how often each team will actually win the match if they played 1000+ matches.
When betting obviously you place bets with the intended outcome of being profitable in the long not just over a small size of a few bets. This is where something called the breakeven point comes into play. To work out the breakeven point you take your betting stake and divide it by the total potential payout.
If the true win rate is higher than the breakeven point you will profit long term as no matter how many times different bets are played out some will lose but more will go in your favour.
So to give this as an example, say Norwich are 10.0 (9/1) against Liverpool in a Premier League match. A £1 bet would return £10 if Norwich win so if that game were to be played 10 times you would need Norwich’s win rate to be 10% to break even or greater to profit. Therefore you wouldnt take odds any lower than 10.0 (9/1) or over the long term you wouldn’t profit. However if you took any odds higher than 10.0 (9/1) your required break even % would go down. Therefore if you managed to get 11.0 (10/1) on Norwich to win then you would only need them to win 9.09% of the time in that game. If you have their win % at higher than the odds taken’s required break even point then over the long term you will profit.
*For the use of this example it was assumed that it was a two way market used for this bet when in reality it would likely be a 3 way market on a football match unless taking Draw No Bet. I will explain the difference between 2 Way and 3 Way Markets in another blog.
This is a simple way of working out probablility, how you spot value and some ways of assessing True Win Rates against bookmakers Implied Probability, I will cover in another blog. I hope this all made sense and helps when working out what bets to take.
The Percentage Game 