What Does EV Mean in Betting?

Returning a profit in the long run at the best sports betting sites is easier said than done. In addition to bookmakers having all the data and other info at their disposal, they also insert vigorish (or house edge if you prefer) into their odds, making your task that little bit harder. 

EV betting, short for expected value betting, has proved to be one of the most successful betting strategies in terms of helping you beat the bookies over a long period.

But what does EV mean in betting in practical terms, what is positive EV betting and why is it so important?

How does EV Work in Sports Betting?

You’ll often hear seasoned and savvy punters talk about betting value, or just, value.

Let’s first consider what value is in everyday life.

If you decide that a second-hand Fiat 500 with 20,000 miles on the clock should cost 18,000 dollars and you find one on sale for 14,000 dollars, that’s a value purchase.             

Betting value is in a way the opposite of that. In everyday life the smaller the price of something in comparison to what you think it should cost, the better. In sports betting, the bigger the ‘price’ (the odds) compared to what you think they should be, the better. 

Whereas in some cases, finding betting value is an instinctive gut feeling based on years of experience, EV sports betting is an extension of that, using a more methodical and mathematical approach. 

What is Expected Value (EV)?

Betting odds are just another way of expressing the probability of a sporting event happening. For example: a 1.4 chance in decimal odds has an implied probability of 71.4%. 

With EV gambling, every bet on offer will either have a positive expected value or a negative expected value. 

The former means that the odds on offer are bigger than what you perceive them to be because the bookies’ implied probability of an event happening is lower than what you think it should be. Where that happens, you’re getting a good value bet and it’s worth backing. 

The latter, negative EV betting, occurs where the odds are lower than what you consider they should be because the betting site’s implied probability is higher than what you think it should be. The bet may win of course, but it’s a poor value bet. 

To sum it up: EV betting is all about comparing the implied probability of something happening as per your calculations against the bookies’ implied probability of it happening, based on their calculations. 

Image Credits: Quirks 

How to Calculate EV

There are four elements involved in calculating EV and by extension, in finding positive EV bets. They are: 

Probability of Winning – How likely is it that the bet will go on to win as per your research? 

Potential Payout – What odds is the bookie offering and what is the stake that the punter wishes to bet on the selection? Taking those two into account, we can work out the potential payout.

Probability of Losing – In a two-runner market like the coin toss in a cricket game or a tennis match, they’re extremely easy to work out because it’s obviously just the flipside of the first element: probability of winning. Where there are three or more potential outcomes, each and every one of them needs to be taken into account. 

Amount Wagered – The stake you’re going to wager is the final element and may alter slightly based on how plus EV betting the selection is. 

Once all this has been calculated, you apply the following formula. 

EV = (Probability of Winning * Potential Payout) – (Probability of Losing * Amount Wagered)

When doing so, the number you come to will either be EV+ or EV-. Only EV+ bets should be struck and the higher the EV+ value, the better value they are! 

The Significance of EV in Betting 

Many bets, assuming they’re not at extremely short prices, are going to lose.

Not only that but as we started by saying, all markets have house edges built into their odds, the ‘not-so-secret-secret’ to most bookies showing healthy profits.

EV+ betting allows punters to address the balance. That’s because it means they’re getting paid out at bigger odds than they should and are therefore receiving bigger payouts than what they perceive to be the correct ones, on winning bets. 

Types of EV Bets

The formula for calculating EV is the same whether you’re betting on the winner of a horse race, the first goalscorer in a football match or a points spread in NFL.  So, there aren’t different types of EV bets, there’s just the same formula used to calculate the EV on different types of bets.  A small but crucial distinction.

EV in Sports Betting

Let’s say Carlos Alcaraz is playing Novak Djokovic in the US Open final.

The odds at BookieBen and the implied probability are as follows:

Alcaraz 
•    Odds of 1.83 
•    Implied probability 54.5%.

Djokovic

•    Odds of 2.0
•    Implied probability 50%.

House edge: 4.5%.

Now, you do your own research and then follow the EV bets formula. Your calculations based on a 100 dollar stake come up with the following:

Alcaraz 
•    Odds of 1.67 
•    Implied probability 60%.

Djokovic

•    Odds of 2.25 
•    Implied probability 44.5%.

House edge: 4.5%

Comparing the bookie’s odds and your odds, two things are instantly obvious:

•    BookieBen’s on Alcaraz are considerably bigger than what you think they should be. 
•    BookieBen’s odds on Djokovic are considerably shorter than what you think they should be.  

So Alcaraz’s odds are comfortably EV+ and you should back him.