Today is the day your entire sports betting world is going to get turned upside down. Okay, so maybe it’s not going to be that dramatic, but for most of you, things are seriously going to take a turn today. We’re going to address one of the biggest misconceptions in all of sports betting that is rampant from beginners to people who have been betting for a long time.
How important is this? Well, to be up front, it’s insanely important. This misconception is the reason that most sports bettors will never make it as a professional or a long-term winner in the game. The craziest part about it is that some people who have been betting sports for years still have no idea about this concept.
Let us say that one more time so that it sinks in. If you do not understand this concept completely, you will never make money in the long run from betting on sports. Period. End of discussion.
It’s All About the Right Goal
What we’re talking about today is your goal in sports betting. When you select a bet, what is the best goal to have? If your answer is that your primary objective is to pick a winner, you’re wrong. Sorry to be blunt, but the purpose of a sports betting pick is not to pick a winner. The purpose of picking a sports bet is to find and exploit value.
Now, let’s make something clear. Just because you are not trying to pick winners does not mean you’re out there trying to pick losers. You’re certainly going to want to win as many of your sports bets as possible, but that is not the driving force behind how you make your picks. Ideally, you’d love to win 100% of your sports bets. But if you approach sports betting trying to lock in more wins than losses, you’re going to be a long-term loser.
If you’re totally confused right now, it’s okay because we’re going to spend a lot of time today breaking this down to make sure you fully comprehend what we’re trying to say.
Win/Loss Records Mean Everything to Some
Ever ask your friends how they did on a sports betting weekend or a day of games? If they give you a win/loss record and say, “Oh great, I went 3-2!” you need to send them this article. Here is why.
- You can have a winning sports betting record and still have lost money.
- You can have a losing sports betting record and still have made money.
Let those two statements sink in for a minute. Your buddy up there that won three bets and only lost two might have lost money on the day. They have their almighty positive win record that seems to mean so much to some people, but they might have lost money on the day. On the flip side, someone who goes 2-3 on the day might have made a ton of money.
How many bets you’ve won versus how many bets you’ve lost is not a good indicator of how profitable your sports betting is. And the goal of sports betting should really be to make money, not to just fluff up your ego.
Now, this doesn’t go to extremes. If someone says they won 5 bets on the day and lost zero, they definitely had a profitable day. If they say they lost every single bet they made, they certainly lost money on the day. But the success of pretty much anything in between is undeterminable by the win/loss record. It’s just used because it’s convenient, and it matches with sports, the very thing we are betting on. It also sounds great to people who don’t understand profitable sports betting correctly, which may be a larger percentage of the population than you originally thought.
Let’s look at a few examples to make sure this makes sense to you before we move on to the metrics you should be paying attention to. Let’s start by looking at your fictitious buddy who said they had a great day and went 3-2. Let’s also say they were betting $100 a game on the NFL. Here are the five games they bet:
- The Patriots to beat the Dolphins moneyline
- The Cowboys to beat the Lions moneyline
- The Eagles to beat the Titans moneyline
- The Jaguars to beat the Jets moneyline
- The Seahawks to beat the Cardinals -1 (spread bet)
Well, as your friend already said, they ended up winning three of these bets and losing two of them. Here are the outcomes:
- WIN – The Patriots to beat the Dolphins moneyline
- LOSS – The Cowboys to beat the Lions moneyline
- WIN – The Eagles to beat the Titans moneyline
- WIN – The Jaguars to beat the Jets moneyline
- LOSS – The Seahawks to beat the Cardinals -1 (spread bet)
To your friend, they had a nice little Sunday. But let’s take a look at how much money they profited. In the chart below, we’ll show you the bets, the payout odds, and what they profited or lost on each individual bet. Then, we’ll total it all up and see how great their Sunday was. We’re going to use the abbreviation “ML” for moneyline. Remember, a moneyline bet just means your team has to win, and it doesn’t matter by how many points.
|Bet Payout||Odds||Amount Bet Game||Outcome||Profit/Loss|
Total Profit = (-$96.13)
Yup, your friend with their winning record actually lost a little over $96. Why? Well, you have to remember that not all bets pay out the same amount of money. The more likely and bigger favorite a bet is to happen, the less you’re going to get paid out. So, if you’re taking a lot of favorites, you’re going to have to win more games than someone who is taking some underdogs.
This doesn’t mean you shouldn’t take favorites or should try and force underdog picks. It’s just an example to show you that shooting for a winning record is not a profitable strategy. People that do this tend to pick more favorites because they are more likely to win. But when you break down the dollars and cents of it all, you see that it’s not that great.
We could have added a couple more winning bets in there, and your friend still might have lost money. If we added two more bets like the Eagles ML that your friend won, they would be 5-2 on the day but still down just under a dollar. How many of you reading this would think your friend crushed it if they told you they were 5-2 on the day? We bet it’s quite a few of you. Heck, your friend who lost money probably still thinks they had a great day.
This is the concept that people are missing. In the next section, we’re going to be talking about something called value. Value is what you should be striving for – not just wins. Wins are something you want to happen, but they are not what you’re chasing.
The Mighty Power of Value
So, if wins are what we want but not what we’re chasing, what should we be chasing? Well, we’re looking for something called value. The simplest way that we can define value in a sports betting sense is this. Value is when you put yourself in a position to get paid more by the sportsbook than you mathematically should be getting. Let’s break this down, and then we’ll show you some examples and practical applications.
Sportsbooks pay you out based on the likelihood of your bet winning. The more likely the bet is to happen, the less they’re going to pay you. For example, in our above section, we had several football games that your friend bet on the moneyline. If you notice, the Eagles win paid much more than the Jaguars win. Why? Well, the sportsbook thought the Jaguars were much more likely to win their game than the Eagles were to win theirs. The payouts your friend received were reflective of this.
This goes for favorites and underdogs as well. The more likely it is to happen, the less you are going to get paid out on a win. This also means that the less likely it is to happen, the more you are going to get paid out on a win.
The sportsbook tries to get the payout as close as possible to exactly what the likelihood is. But sometimes they are wrong, or the payout odds move, creating a difference between what they should be paying and what they are actually paying. When you find these opportunities, it is said that you have found value.
Let’s look at a situation where the sportsbook nails it on the head. We’re also going to pretend we’re able to make the exact same bet 10 times in a row. While this isn’t possible in real life, it still works if you make 10 different bets that still have or do not have value. Basically, what we are proving here in a vacuum does apply to the real world as well.
When a sportsbook gives you payout odds, those can be converted into a percentage chance that the sportsbook thinks the bet is going to win. We aren’t going to get into those conversions and what are called implied probabilities today, but we do cover those over in our advanced strategy section on understanding value. For now, just understand that these payout odds can be converted to the percentage the sportsbook thinks the bet is going to win.
For example, we’re going to look at 10 bets at payout odds of (-150) today. When you convert this, it means that the sportsbook thinks you are 60% likely to win this bet. So, if the bet is run 10 times, they say you are going to win 6 of the 10. Let’s look at what that looks like for your profit if the sportsbook is correct.
|Bet #||Odds||Amount||Bet||Outcome Profit/Loss|
If you add up your profit and loss for all of these bets, you’ll see that you come out exactly even. (We rounded the payouts slightly, so you may be getting a couple pennies off). Basically, this is a bet that has absolutely no value. You are getting paid exactly what you should be getting paid. You are getting paid at a 60% rate for a bet that actually happened 60% of the time.
But what happens when the sportsbook is wrong, or the line has moved somewhere that you think is wrong? Remember, we said value is when you are getting paid better than you should be. We also said you get paid more the less likely something is to happen.
So, in our above example, the sportsbook is paying you out as if the bet is going to win 60% of the time. But what if you think the bet is actually going to win 70% of the time? If the sportsbook agreed, they would adjust the payouts and give you less because you are going to win more often. But since they didn’t, if you are right about the 70%, then you’ve found some value! You’re getting paid out a premium for a bet that’s only supposed to hit 60% of the time, but you’re actually going to win 70% of the time.
Here’s what it would look like if you were correct and the sportsbook line was wrong.
|Bet #||Odds||Amount||Bet||Outcome Profit/Loss|
Now, if you add up your profit and loss, you see that you turned a $66.67 profit! This is because you found value and took advantage of it.
Keep in mind that you can have value on favorite bets as well as underdog bets. You can also have no value on underdog bets. Just because they are paying you out more than even money does not automatically mean they have value.
The only way value is present is when you are getting paid more than you should based on the likelihood of the bet hitting. Now, you are probably wondering how you figure out what the likelihood of a particular bet is to hit. Well, this is where the skill in sports betting comes in. Unless you can see into the future or have a magical crystal ball, you’re going to have to make a prediction and hope to be right.
In our advanced strategy guide that we linked above, we give you a lot of more advanced ways to calculate this. When it’s time, we recommend reading that guide and learning the advanced techniques. But for now, we can give you an easy way to get started on this.
- Convert the sportsbook’s payout odds to an implied probability using an implied probability calculator. Implied probability is just a fancy word for the percentage chance the sportsbook thinks that bet is going to win.
- Figure out the percentage chance you think the bet is going to win. While we have more advanced ways of doing this, here’s an easy way to visualize it. Imagine that the teams are going to play each other 100 times. How many times do you think a particular team would win? Let’s say you think they are going to win 65 times. Well, that means you think they are going to win 65% of the time. If you think they are going to win 30 times, you think they are 30% likely to win.
- Compare the two numbers. If your predicted percentage (how likely you think they are to win) is GREATER than the implied probability (how likely the sportsbook thinks they are to win), then there is value, and that is a bet you should be making. If they are the exact SAME, then you don’t see any value in that bet. If your percentage is LOWER, then you may want to look into betting on the other side of the game.
This is the simplest way to calculate value, but it can still be effective. How much you win or lose at sports betting will come down to how well you can predict this percentage. The more accurate you are, the more value you are going to find, and the more money you are going to make.
Wrapping It All Together
Today is all about shifting your focus and your overall end goal when you approach making your sports betting selections. While we always are going to want to win our bets, that can’t be the reason we make a bet. When you are looking at a bet, don’t ask yourself, “Am I going to win this or not?” Ask yourself if the bet has value or not.
When you bet value bets (especially underdog bets with value), you may lose more bets than you win. This is okay, though, if you’re really finding value. In the long run, you are going to come out profitable. So, when your friends are rattling off how many bets they’ve won, you can hit them with your profit numbers – the numbers that really matter.
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