In the context of sports betting, value can be either positive or negative. Positive value exists when the probability of a wager winning is greater than the probability reflected in the odds. To put it another way, a wager has positive value when it’s MORE likely to win than the odds suggest. A wager has negative value when it’s LESS likely to win than the odds suggest. In order to make money, you’ll need to find positive value.
The probability reflected by the odds is known as the implied probability. We’ll explain more about that shortly, but first we’re going to illustrate the concept of value with a very simple example. We’ll come away from sports betting for a moment, and look at the toss of a coin.
Now, we all know that the toss of a coin has two possible outcomes. It can be either heads or tails. Each outcome is equally likely; there’s a 50% chance of heads and a 50% chance of tails. Imagine that someone offered you the opportunity to bet on the outcome of a coin toss, at the following odds.
At these odds, a RM10 wager on heads would return RM30 if successful. A RM10 wager on tails would return RM15 if successful.