A value bet is a bet whose odds are higher than they should be, given the true probability of the event.
The value condition
There's value when:
The change of mindset
The typical bettor asks: "Who's going to win?" The value bettor asks: "Is this price too generous?"
These are two very different questions:
- A favourite at 1.30 can be a bad bet even if it wins 70% of the time (if its true probability is 70%, the fair odds would be 1.43).
- An outsider at 6.00 can be a good bet even if it loses 80% of the time (if its true probability is 20%, the fair odds would be 5.00).
Where does the probability estimate come from?
That's the hard part. The main sources:
- A highly efficient (sharp) reference bookmaker, with the margin removed. If another bookmaker offers higher odds, there's probably value.
- A statistical model (form, xG, Elo ratings…).