Assessing the probability of something happening is essential to making wise decisions, that goes for life and especially for Sports Betting where you need to be aware of what you’re gambling and the chance of you losing or winning.
This way you can weigh your risk for appetite against the opportunity in front of you.
The problem is, we sometimes get the probability wrong with emotional bias, placing a bet we think will win and probably looking back in hindsight at our mistake with 20/20 vision.
Whilst in hindsight there is only one outcome to an event, if in theory, we could repeat the same matchup or event multiple times we would get different outcomes, it is only the outcome observed that is the correct one.
So with this information, you should understand that, you can never be 100% correct, the truth is it’s always a gamble, whether you think it is or isn’t is up to you.
In a scenario where you could repeat the matchup as we suggested, this is the same as rolling a dice, you’d get a different outcome, the only way to put the odds in your favour is by weighing the probability of an outcome and using that to give you an edge.
Weighing the probability of an outcome is far more important than probability theory, but understanding that doesn’t do you any harm and can keep you in a logical position when making decisions.
The basics of probability would be easiest explained by first reducing the number of possible outcomes. So for example the possible outcomes of a horse race, in theory, are infinite, horses could come in multiple orders if the race was repeated. The number of outcomes however for rolling a dice is limited to 6 outcomes in a fair environment, therefore the probability of an outcome are 1/6 or 0.1666.
Measuring the probability of certain sports is extremely complex and no matter how great you are you won’t get your probability predictions right every time, but understanding that its OK to lose can be comforting.
The truth is you can never be right and so you should assess the probability of losing into your betting decision.
How can I use Probability to Find Value?
When betting on sports, your win rate should always be tracked, this is the number of games you win, compared to the number of games you lose. Normally this is a percentage such as 60%, so when you place 10 bets, you should expect to win 6 of those on average.
If you won every single bet then your win rate would be 100%, but as we already explained with basic probability theory, that is unrealistic if not impossible.
Whilst having a high win rate is comforting, remember that it doesn’t always mean you are making a long-term profit. It also depends on the odds of the games you win and the games you lose whether you make a profit.
This is why it’s important to couple your win rate probability with finding value, you want to find quality picks so that your 60% win rate means you come out on top.
So how do I use Probability in Sports Betting?
We’ve already talked about how a dice has 6 possible outcomes with 16.6% chance of you guessing the correct outcome but with Sports Betting it isn’t as straightforward. It’s impossible to calculate the exact probability of an outcome as there are infinite outcomes and multiple factors involved, you can apply all the statistics and strategy you like but it won’t be 100% right.
At the end of the day, the only thing you can 100% calculate is what you believe the chances are of a particular outcome. This is exactly what Bookmakers will do before setting the odds, while the odds set the likelihood of an outcome, they’re the assessment of the bookmaker and may not be a correct representation of the probabilities involved.
That means it is possible to overcome their advantage of setting odds, whilst not easy, possible and could give you some great returns.
Implied Probability and The Value Of an Outcome
The implied probability is what bookmakers odds suggest the probability of an outcome happening, so if the odds to win a matchup are 1.5 the probability is 67%. 1/1.5 = 0.6777.
So let’s say the odds of a team winning are 2.5, which if correct means a 40% chance of winning if you place £10 you will make a return of £25. This means you will win £25 40% of the time and lose £10 60% of the time.
To calculate if these probabilities are worth the value we need to calculate the expected value:
(Probability of Winning x Winnings) – (Probability of Losing x Stake)
So with the example above lets put this into practice:
(40% x £15) – (60% x £10) = £6 – £6 = £0
So, therefore, the expected value is £0, meaning you would break even if the matchup was constantly repeated. Now of course as we have discussed before in hindsight there is only one outcome but this is a theoretical way of measuring the value of a bet to see if it’s worth backing.
Now the only issue with this calculation is that we assume that the real probability is the implied probability.
You should therefore use this calculation with your perceived probability backed by statistics and analysis.
Summary
This article is a bit more theoretical than our other articles but you should take these things from the article.
- Probability on its own isn’t useful. You also need to seek value as we’ve mentioned before. You need a consistent win rate with valuable bets.
- To get the probability of a match, you should calculate your perception of it. The bookmakers’ odds are not always right and therefore with some strategy and analysis to back up your experience you can calculate the value of a particular outcome.
- This is all theory, whilst it can be useful to digest what we’ve written here, which is to find expected value using probability, value is subjective due to the perceived probability. You’ll only win if the probability is correct and the expected value is more than 0.
Finding value isn’t easy and is fundamental to stay on top. Understanding probability is essential to success and making wiser decisions.
Find out more about sports betting through our articles, or why not smash the bookies with us here
