Expected value (EV) is a fundamental concept in sports betting that helps bettors understand the potential profitability of a bet over time. By calculating expected value, you can make more informed decisions and increase your chances of long-term success. In this article, we’ll explain what expected value is, how to calculate it, and why it’s an essential tool for every sports bettor.

What Is Expected Value?

Expected value represents the average amount you can expect to win or lose per bet if you were to place the same wager many times. It is calculated by considering the probability of each possible outcome and the odds offered by the sportsbook. A positive expected value (+EV) indicates a potentially profitable bet, while a negative expected value (-EV) suggests a bet that is likely to result in a loss over time.

Why Is Expected Value Important?

Understanding and calculating expected value is crucial because it allows you to:

• Identify Profitable Bets: By focusing on bets with positive expected value, you can improve your chances of long-term profitability.
• Avoid Bad Bets: Negative expected value bets might seem appealing in the short term, but they are likely to lead to losses over time.
• Make Informed Decisions: EV helps you make data-driven decisions rather than relying on gut feelings or hunches.

How to Calculate Expected Value in Sports Betting

Calculating expected value involves a straightforward formula. Here’s a step-by-step guide to help you understand how to do it:

1. Understand the Formula

The basic formula for calculating expected value is:

Expected Value (EV) = (Probability of Winning) x (Amount Won per Bet) – (Probability of Losing) x (Amount Lost per Bet)

Let’s break this down:

• Probability of Winning: This is the likelihood of your bet winning, expressed as a decimal. For example, if you believe there’s a 60% chance your bet will win, the probability is 0.60.
• Amount Won per Bet: This is the profit you will make if your bet wins. It is calculated by multiplying your stake by the odds, minus your original stake.
• Probability of Losing: This is the likelihood of your bet losing, expressed as a decimal. If there’s a 60% chance of winning, the probability of losing is 1 – 0.60 = 0.40.
• Amount Lost per Bet: This is the amount you will lose if your bet doesn’t win, typically equal to your stake.

2. Convert Odds to Implied Probability

Before calculating EV, convert the sportsbook odds to implied probability. For example, if the odds are +150, the implied probability is calculated as:

Implied Probability = 100 / (150 + 100) = 0.40 or 40%

If the odds are -150, the implied probability is:

Implied Probability = 150 / (150 + 100) = 0.60 or 60%

3. Plug the Numbers into the Formula

Suppose you’re considering a bet with the following details:

• Odds: +150
• Stake: $100
• Implied Probability of Winning: 40% or 0.40
• Probability of Losing: 60% or 0.60
• Amount Won per Bet: $150
• Amount Lost per Bet: $100

Using the formula:

EV = (0.40 x $150) – (0.60 x $100)

EV = $60 – $60

EV = $0

In this case, the expected value is zero, meaning that over the long term, this bet is neither profitable nor unprofitable.

4. Interpret the Results

• Positive EV: If the result of your calculation is positive, the bet has a positive expected value, indicating potential profitability.
• Negative EV: A negative result suggests that the bet is likely to result in a loss over time.
• Zero EV: A result of zero means the bet is neutral, with no expected profit or loss over the long term.

Practical Example of Expected Value

Let’s consider another example with different odds:

• Odds: -120
• Stake: $120
• Implied Probability of Winning: 54.55% or 0.545
• Probability of Losing: 45.45% or 0.455
• Amount Won per Bet: $100
• Amount Lost per Bet: $120

EV = (0.545 x $100) – (0.455 x $120)

EV = $54.55 – $54.60

EV = -$0.05

This bet has a slightly negative expected value, indicating that, over time, you would expect to lose about 5 cents for every $120 wagered.

Why You Should Focus on Positive EV Bets

Focusing on bets with positive expected value is essential for long-term success in sports betting. While individual bets with positive EV won’t always win, consistently placing positive EV bets increases your chances of profitability over time. By incorporating EV calculations into your betting strategy, you can make more informed decisions and avoid bets that are likely to lose money in the long run.

Conclusion: Mastering Expected Value in Sports Betting

Calculating expected value is a powerful tool that helps you make smarter betting decisions. By understanding and applying the EV formula, you can identify profitable opportunities, manage your bankroll more effectively, and improve your overall betting strategy. Remember, the key to success in sports betting is not just winning individual bets but consistently making bets that have a positive expected value over time.