In the betting world, odds matter. From a bookmaker setting the line to the price you accept on a bet, the numbers define how potentially lucrative a wager can be. With that being the case, it’s important to not only understand what odds are but how they’re derived.
Despite what you may think, cricket betting lines aren’t just plucked out of thin air. Instead, they’re the result of probabilities. Once the bookmaker has estimated the probability of an outcome, their job is to adjust it slightly in their favour and convert it into a format you recognise. Why do they tweak the numbers? Simple: they must make a profit.
Of course, you’re also hoping to make a profit, which is why you need to understand these equations. Only by having a handle on how probabilities and odds work can you try to find the best bets. In technical terms, your job is to make positive expected value (+EV) bets. As long as you can do that, you’ll give yourself the best chance of making a long-term profit. However, to establish what’s potentially +EV and what’s not, you have to start with the odds.
The easiest way to explain the notion of probability is by using a simple coin toss as an example. When you toss a coin, there are two possible outcomes:
- Outcome 1: Coin lands on heads = 50% chance of happening
- Outcome 2: Coin lands on tails = 50% chance of happening
In mathematics, probabilities are expressed as numbers between 0 and 1. If you want to express probabilities are percentages (which most of us are more familiar with), you multiply the probability by 100. So, in the above example, the probability of the coin landing on heads is 0.5 (1 outcome / two possible outcomes = 0.5).
When you multiply this by 100, you get a 50%. If you want to derive the probability from a percentage, you do the reverse. In the above example, you would simply divide 50(%) by 100, which gives you a probability of 0.5.
Once you’ve comfortable with probabilities and percentages, you can start converting them to odds. For simplicity, we’ll assume that you already know the probability. If you have a percentage, convert it as outlined above. To determine the odds, you divide 1 by the probability:
- 1 / p = odds
- Coin Toss: 1 / 0.5 = 2.00
Take this a step further by considering a dice roll. With six possible outcomes, the probability of hitting any single number is 0.167, i.e. 1 / 6 = 0.16666 (rounded up to 1.67). If we want to express that number as a percentage, multiply it by 100 to get 16.7%. Moreover, if we plug the probability in our odds equation, we get:
- Odds of landing on a single number: 1 / 0.167 = 6.00 (rounded up from 5.98)
We’ve outlined how to calculate probabilities, percentages, and odds. Now we can look at EV. As we’ve said, your job as a cricket bettor is to make +EV bets. Why? Because, if the numbers are correct, your long-term “expected value” should be positive (i.e. a profit) if you also follow a strict bankroll management strategy.
- Expected Value (EV) = (amount won X probability of winning) + (amount lost X probability of losing)
If we go back to our dice example, you might decide to stake ₹100 on the number five, which the bookmaker has given odds of 6.0. Using this information, we can say that this is a neutral EV bet (i.e. in theory, you should end up even in the long run):
- If 5 hits – You win ₹600 i.e. you have one way to win
- If 1, 2, 3, 4 or 6 hit – You lose ₹100 i.e. you have five ways to lose
- EV = (1/6 X 500) + (5/6 X -100) = 83.333 + (-83.333) = 0
Because the result is zero, you don’t stand to make a long-term profit or loss, in theory.
As we’ve said, cricket betting is a business. If a bookie gave you the exact odds, they’d never make a profit. Indeed, with the example above, odds of 6.0 don’t make sense from a business perspective. Therefore, the betting odds will always be slightly different from the true odds.
For example, instead of giving you 2.0 on a coin toss, a bookmaker may give you 1.85 if you bet on heads. When you plug this into the EV equation, you get the following:
- EV = (1/2 X 100) + (1/1.85 X -100) = 50 + (-54.05) = -4.05
Because the answer is a minus number, we can see that it’s a negative EV bet. To make this even clearer, we can express this equation in a different way using the same probabilities and odds.
- Every second toss, you’ll win ₹85 when you bet on heads (i.e. ₹100 stake X 1.85 = ₹185 - ₹100 stake = ₹85 profit)
- Every second toss, you’ll lose ₹100 when you bet on heads (i.e. coin lands on tails and you lose your ₹100 stake)
When you take the figures above and establish your EV using the true probability of a coin toss (i.e. 0.5) you get:
- ₹85 X 0.5 + -₹100 X 0.50 = -₹7.50
This means that you’ll lose ₹7.50 when you bet on heads when the odds are 1.85. To put it another way, the bookie expects to make ₹7.50, in the long run, when you accept this bet.
When you know the EV of a bet like this, you can ask: what is my return on investment (ROI)? ROI is the amount of money you expect, in theory, to win if you replicated the same bet thousands of times.
As cricket sports bettors, we know that anything can happen in the short term. You might get lucky and win ten times in a row. However, as a savvy customer, you should always be thinking about long-term outcomes. That is where EV and ROI come into play. In the above scenario, your ROI would be:
- ROI = EV / bet amount
- ROI = -₹7.50 / ₹100 = -0.075 X 100 = -7.5%
When you look at the numbers, it’s easy to see why odds of 1.85 on a coin toss aren’t great. Overall, you stand to lose 7.5% of what you invest in this bet. In other words, it’s -EV, and you should avoid it.
It’s important to understand how probabilities, odds, EV, and ROI connect because they can determine how profitable you could be. Of course, there are no guarantees in betting. However, to give yourself the best shot at making a long-term profit, you need to use these types of equations. The main concept you need to understand is that your job is to identify +EV and -EV bets. If you can do that, you’re on the road to success. Unfortunately, this is easier said than done. Even if you know how to do the maths, that doesn’t mean you can spot the best bets.
For a coin toss or dice roll, the number of possible outcomes is not only fixed but obvious. However, when you start sizing up things such as cricket matches, determining probabilities is tough. Because there are so many variables (both known and unknown), it’s hard to get an exact figure. The good news is that it’s just as hard for bookmakers. Just as you have to estimate the probability of an outcome, they have to do the same. Therefore, betting becomes a game of who can make the best estimate.
If you see a set of odds that don’t look right, they might be +EV. The bookmaker may have underestimated the probability of a certain outcome due to a lack of information or experience. In contrast, you might have more knowledge than the bookie and spot the flaw in their calculations. In this scenario, you could be onto a winner.
Again, anything can happen. However, this is the process you have to go through if you want to pick out +EV bets. By doing your calculations and comparing them to what the bookies are offering, you can discover value betting chances on a regular basis and make a long-term profits.