What is Value Betting?
Value Betting is backing something on the basis that you think the chances of it winning are better than the odds available. This means you are looking for something that you think is overpriced, therefore good value.
Does it mean you always back the most likely winner?
Backing something that is deemed value is rarely a bet on the most likely winner or favourite. In most cases the bet will be on an outsider or a bigger priced fancied selection.
You see a horse priced at 5/1 yet you estimate it has a 33% chance of winning (fair price 2/1)
a) Assuming you are right with your estimate then there is still a 67% chance you will LOSE!
b) IN THE LONG RUN if you are right then if you meet this situation 3 times then you can expect 1 winner (paying 5) and
2 losers (losing 1) giving you a profit of 3
Any horse can be value
Short priced favourites can be value.
If a horse is priced at 1/4 then this is fair odds if it has an 80% chance of winning
However if you think it has a 90% chance of winning then the odds are good value
Examples of value betting
Many value bets are based on predicting returns to form of football sides, horses, greyhounds or anything else. There has to be a valid reason for them to return to form though for it to be deemed a value bet, rather than just a big priced guess.
In football a team might return to form because a key player has returned from suspension or injury. They might also have just had three or four very hard games in a row which they may have lost, which would lead to the conclusion they are out of form. However, playing an easier side could bring about a revival in their fortunes.
A horse might favour a particular type of course or a particular type of going and might have raced without its favoured conditions for many races in a row. When returning to its favoured conditions it will most likely be priced up on its recent form which wouldn't be very good. It can be expected to improve for a return to its favour conditions meaning the price for it to win is too big which makes it a value bet.
There can also be value gained in opposing big reputations, be it in football, horse racing or any other sport. In the 2007 flat racing season the Coral Eclipse at Sandown had three main contenders, Authorized, George Washington and Notnowcato. Authorized was sent off at 4/7 despite being unproven at the top level over 10 furlongs, George Washington was sent off 4/1 despite being unproven over 10 furlongs and Notnowcato, a winner of two group ones, one of which was over the same trip on the same ground was sent off at 7/1. Notnowcato won by 1 ¼ lengths and even those who only backed for place money cleared up.
Each way value betting
Value bets don't just have to win to be profitable, there are also many value each way opportunities out there. Some horses in big field handicaps where four places are paid can be very likely to place but quite unlikely to win. Backing them each way can often effectively give you a free win bet on them as you believe they are very likely to reach the frame at least. Alternatively a horse could be such a big price that gaining a place could be very profitable alone.
You may back a horse at 33/1 in a 16 runner handicap not because you think it will win but because you think it has a decent chance of running into a place.
Another way a selection can be each way value is in races with a very short priced favourite. This will make all the other runners at least high single figures making backing each way a profitable bet if all it has to do is follow the favourite home to yield a profit. The bookies call these 'bad each way' races and whilst they often place restrictions on stakes it is not too difficult to get a bet on.
What do you need to spot a value bet
To spot a good value bet first of all you are going to need a very good knowledge of the sport you are betting on so that you are able to determine what factors are in the favour of the bet which makes it look so overpriced.
One of the best techniques to find value bets is to price up markets yourself before the market is formed. By pricing events up on how you feel they are likely to unfold you can then compare your own market to the real market when it is formed and look for the differences. The selections that are much bigger at the bookies than with your own prices should be the value calls in that event. The bigger the difference, the bigger the value.
Finding value bets can also be applied to laying on the exchanges. Again, it is often best to decide what prices should be before the market is formed with the bookies. Any selection that is a smaller price with the bookmakers than with your own prices should be considered a lay because they are underpriced according to your odds. The more underpriced the selected outcome is, the better a lay it is going to be.
You may think a horse has a decent chance of winning but you think it should be an even money shot. The bookies have priced it up at 1/2. This should be a value lay.
Advantages of value betting
Theoretically most bets you should place should be considered value bets. It is okay to place your fair share of bets at odds that are deemed to be fair if you think it is a very likely winner but you should never bet on anything that you think represents poor value.
By backing value calls you should be profitable in the long term as it only takes one win to make a big difference to your betting bank.
Disadvantages of value betting
Value betting can sometimes be difficult if you don't have a very strong knowledge of what you are betting on. It is time consuming to price up lots of different events before the bookmakers do so and if not done properly it can lead to mistakes being made when deciding what is value and what isn't.
Betting on value shots rather than most likely winners should yield a profit over the long term but in the short term you have to be willing to expect losing runs. Discipline is required to not chase these short term losses and you must try not to give up during a losing run as if you are betting on real value bets then it should only be a matter of time before you back a winner and are back in a profit.
Value Betting Nonsense
Go on any forum and you'll see some comments on value betting that just make no sense. Here are some of the popular misconceptions
1. Short Price is not value
What matters as described in the example above is how the price compares to the chances of it winning. What the actual price
is doesnt matter.
2. Bigger price is better value
As above. A big price could be terrible value if the selection is priced lower than its realistic chance. 2/1 odds on something with
a 25% chance of winning is worse value than EVENs on something with a 50% chance of winning.
3. If something is a short price, combine it in a multiple to get better value
If something is a short price then it may or may not be value depending on the chance. Combining the selection with another selection
wont change the value of either selection it will just compound the value of each into one bet.