How to Calculate Expected Value in Betting
Despite the fact that betting is a game of luck, there are some technicalities inherent in sports betting. Each and every sport bettors are expected to understand these techniques in order to improve their chances. Worry not if you are not conversant with the techniques for we are going to properly enlighten you about the easiest way to calculate the expected value of what you could earn or loose when placing bets.
In betting, the expected value, also known as “EV” is the calculation of what you tend to win or lose per bet placed on same odds time. The Positive expected value “+EV” means profit over time, while the negative expected value “-EV” means lose over time.
Calculating Expected Value Made Simple
Expected Value can be calculated using some simple statistics and probability methods. A simple calculation of Expected Value (EV) using a coin states: if you are to bet NGN10 on the head in a single coin toss, and you are expected to receive NGN11 every time you get it right, the EV would be 0.5. This implies that if you were to make the same bet on heads continuously, you are expected to win an average of NGN0.50 for each bet of NGN10.
The expected value is simply calculated by multiplying the probability of winning, with the amount you could win per bet, and subtracts the result from the probability of losing, multiplied by the amount lost per bet
Are you still confused? Read carefully, the following steps for proper understanding:
- Firstly, find the decimal odds for each outcome
- Secondly, calculate potential winnings for each outcome. (Multiply your stake by the betting odds and subtract the stake).
- Thirdly, calculate the probability of that outcome by dividing 1 by the odds of an outcome.
- Lastly, apply these steps to the above formula.
Now that it’s getting more interesting, we are going to give one example for a better understanding of the calculation:
Let’s take a match between Arsenal and Chelsea for example. Arsenal has odds of 1.40 and Chelsea has 13.50 for a win. Let’s assume a draw is at 6.50. If the better place a bet of NGN10 on Chelsea, he stands to receive NGN125 in winnings. Assuming the probability of the occurrence is 7.4%. The probability of having a different result is (Arsenal wins + Arsenal lose) = (0.714 + 0.153) = 0.867
Calculating EV = (0.074 * NGN125) – (0.867 * NGN10) = NGN0.58
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Enlightenment about the calculation of EV is recommended for every Nigerian Sports Bettor. You are required to put the above calculations into practice before placing any bet. From the above, we can assume that you can now calculate EV on any bet by yourself.