Sports Betting Variance and expected value are terms that most sports bettors are familiar with. However, only a few understand what they mean. Even fewer people apply it to their bets. What does EV mean in gambling? Here’s all you need to know about EV sports betting. We will also discuss why it’s the most crucial aspect in determining your sports betting return on investment.
There is a lot of terminologies linked with sports betting in general. So, there is no doubt that you might not even be aware of them.
For the most part, sports betting is just a matter of looking at the odds of an event. Then, select whether or not to wager on one prediction or the other. However, it might be good for bettors like you to learn about other terminology and phrases related to putting sports bets on occasion.
So, in terms of sports betting, what does “EV” mean in betting? Do you know what is a sports betting variance?
And once you know that, how can you put that information to work for you in terms of winning additional bets?
Fortunately, that’s exactly what we’re here to discuss today — sports betting’s expected value and variance. We’ll go over variance, the significance of thinking long-term, and how to profit from both upswings and downswings when value betting.
What Does EV Mean In Gambling?
Expected value (EV) in betting is a measure of how much money you may expect to win or lose on a long-term wager. Because it represents the average throughout time, there is no variance. Then from the closing line, you can determine the expected value.
What is a Closing Line Value (CLV)?
You can calculate the CLV using the sharp bookmaker odds right before the sporting event even starts. The right term to describe this situation is the “real odds”. Also, this is the best predictor of a match’s outcome.
In theory, you should be profitable if you consistently bet on odds that are greater than the closing line. “Beating the closing line” is a word for this.
As such, value bettors are more than 80% of the time successful in beating the closing line.
However, the value of your real profit may change significantly from the CLV. This is because of sports betting variance. The variance measures the difference between your profit and the Closing Line Value. This is how far a set of values is spread out from their average value.
When betting on sports, it is also crucial to learn about profit, ROI, and yield measures. These give you information on your real outcomes, which are determined by how the sports contests end up.
On the other hand, the ROI is a measure of how much your money grew over time. Also, take note that your return is unaffected by the size of your bankroll. The return on investment (ROI) will normally improve with time. However, the yield will remain relatively constant.
So, what does EV mean by gambling?
The expected value in betting is the mathematical basis of every intelligent sports wager.
After mastering the basics of point spreads, moneylines, and other wagering terms, you’ll frequently hear punters refer to “expected value.” However, before we go any further, let’s have a look at an example.
What Does EV Mean In Betting: A Closer Look
Let’s say you visit your favorite sportsbook in Singapore. Then, you see that there is a Premier League football match scheduled for the near future.
The sportsbook gives Manchester City a -125 odds to beat Leicester City in this match.
Before you go any further, consider whether or not this is a reasonable line. Although this needs some basic arithmetic, it’s well worth it in the end.
Before you start, you must assign Manchester City a winning % that you feel is accurate.
How many times do you think Man City would win if these two teams played each other 100 times?
In this case, you should think about factors like:
Moreover, you also need to consider everything else related to sports betting while calculating EV in sports betting.
Afterward, you mentally run the calculations. Then, you determine that Man City has a 70% probability of beating Leicester. This refers to being your own true implied probability. Then you must compare that likelihood to the indicated probability of the odds presented. So, you can decide whether the line has value or not.
Calculate the Perceived Edge By Converting To A Percentage
Betting odds reveal a lot more than the amount of money you’ll win if you win. You can convert the odds into an implied probability. So, you can compare it to your true implied probability to see if you have a perceived advantage or not. In this case, the true implied probability is 70%.
To do this comparison, you must translate the bookmaker’s odds into a winning percentage.
This is how the formula looks:
Convert “-” moneyline odds to its implied probability:
Implied probability = (- (Odds) / ((- (Odds)) + 100)
Convert “+” moneyline odds into implied probability:
Implied probability = 100 / (positive moneyline odds + 100)
In this case, the Manchester City are listed at a -125 odds:
(-(-125)/((-(-125)) +100) = Implied probability
125 / (125 + 100) = Implied probability
125/225 = Implied probability
0.55555 or 55.6% = Implied probability
Therefore, the implied probability calculated using sportsbook odds is 55.6%.
Furthermore, the implied probability will be more accurate if we will removes the vig from the sportsbook odds.
We can see an edge on this wager when we compare our true implied probability to the implied probability from the sportsbook odds. This is because 70% is greater than 55.6%.
How to calculate an edge in sports betting?
When your true implied probability exceeds that suggested by the odds, you have a perceived advantage. We need another simple computation to get the actual size of this edge represented as a percentage.
Edge = (True Implied Probability * Sportsbooks’ Decimal Odds) – 1
You’ll need the sportsbook odds in decimal form. Meanwhile, an odds calculator will save you the time and effort of doing it by yourself.
In this situation, a decimal representation of the -125 odds at the sportsbook is 1.80.
(.7 * 1.80) – 1 = Edge
1.26 – 1 = Edge
0.26 or 26% = Edge
When betting on this line, the 26 percent edge we found represents a long-term profit of 26 percent.
Calculating EV Sports Betting
It should now be evident that this concept is rather abstract in its application, and it is only true if both the sportsbook odds and our personal predicted winning percentage are 100% right.
So, what does EV mean in gambling?
Let’s imagine we place this wager 100 times on the Manchester City vs. Leicester game, each time betting £125. For this example, let’s pretend we live in a perfect universe where the sportsbook’s odds, as well as our own genuine implied probability, are always 100 percent accurate.
Based on the 70 percent real implied probability discussed previously, we would win 70 times and lose 30 times on that bet.
Based on the -125 odds, we made a profit of $100 each time we won.
- $7,000 profit (70 x $100).
- Every time we lose, we have to give out $125.
- $3,750 in losses is the result of 30 x $125.
We’d be in the black after 100 bets, with a profit of $3,250 – $7,000 minus $3,750.
If we convert that sum to a profit per bet, we would make $32.50 on each of our bets – $3,250 divided by 100.
The $32.50 is about 26% of the $125 that we are risking each time, therefore we have a 26% advantage.
What Does EV Mean In Gambling And How To Identify The Value Bet?
After learning what does ev means in gambling is, you need to know how to determine the value bet.
If you spend enough time in the sports betting industry, you’ll hear the term “value bets.” Once you understand the concept of EV, finding value bets will be easy.
A value bet is defined as a wager with a positive expected value. As a result, it’s frequently used interchangeably with expected value+ (EV+) bets.
When an EV+ bet becomes a value bet, there is no specific percentage to look out for.
After all, even a small bit of +EV will help you expand your bankroll over time. As a result, any positive percentage is beneficial. The key to getting the most out of it is to find the right balance between taking advantage of EV+ possibilities while avoiding taking on too much risk.
Also, you must examine the size of your bankroll. At the same time, you need to check its capacity to resist variation while betting on longer odds.