What does value betting on cricket odds refer to?
In short, value betting is when you bet on odds that you do not think accurately reflect the chances of that outcome happening.
The famous coin toss scenario can best explain value betting. If you flip a coin, it can only land on heads or tails. Each side has an exactly 50% chance of happening every time, no matter how many times you flip it.
If Sportsbet.io, for example, was offering odds on a coin toss, it could never make money in the long-term by offering odds of 50/50 - in decimal odds that's 2.00.
Instead, they would offer something like 1.90 on each outcome, therefore, making a small profit in the long-term. That is the bookmaker's margin - 4.8% in this case - and applies to every market they offer. We explain the overround in more detail below.
Now imagine that a bookmaker offered you 2.10 on heads and 1.90 on tails. What would you back?
You should always back heads - the odds offered are higher than the real chance of it happening. Of course, you wouldn't win every time, but in the long-run, you would be guaranteed to make money.
The key to becoming a successful cricket bettor is finding these value bets - prices offered by bookmakers which you think underestimate the chance of the bet happening.
Remember, bookmaker's prices in their purest form are simply opinions. No-one in the world can 100% accurately price up a cricket match - there are just too many variables. This applies for all sports events.
Their opinions may be backed up by stats, data, and years of experience, but they can still be wrong.
Secondly, and importantly, bookies' odds are often influenced by what they think people will bet on. We will explain how this offers you value opportunities later.
So, since the cricket odds you bet on originate from the bookmaker's event probability assessment, they don't necessarily reflect the real probability.
If you can estimate the probabilities of certain events taking place in a cricket game more accurately than the bookmakers can do, then you have got an edge.
Let's look at an odds example. LeoVegas is offering betting on a Twenty20 cricket match played between New Zealand and India at a neutral venue with the following odds:
- New Zealand - 2.75
- India - 1.49
Can we justify placing a bet on either team by applying the value betting theory?
Firstly, we need to use our skill and judgment - backed up by stats, historical results between the sides, team news etc. - to create our own probabilities of each team winning.
Let's say we think New Zealand have a 40% chance of winning and India a 60% chance. Our percentage totals will always add up to 100%.
Next, we need to convert the LeoVegas odds into percentages. The formula or equation for this is 1 divided by the decimal odds, multiplied by 100.
New Zealand - 1/2.75 X 100 = 36.3%
India - 1/1.49 X 100 = 67.1%
Total - 103.4%
Why is the total adding up to more than 100%? Because the 3.4% is the bookmaker's profit margin or overround.
In theory, this means that if the bookmaker takes ₹1,034 worth of bets on the cricket match proportionally placed on New Zealand and India, they will only have to pay out ₹1,000 in winnings regardless of who wins, meaning they have ₹34 in pure profit.
This is how bookmakers make money and demonstrates how vital it is to offer accurate odds together with good risk management practices.
If they offer too big odds on one team, everyone will bet on that team, leaving them with an unbalanced book and the potential of losing a lot of money if the favoured team wins.
In our example above, our percentage probabilities, and the bookmaker's probabilities are different. There is a value opportunity here - betting on New Zealand at odds of 2.75.
From our own estimations, we concluded that there is a 40% chance of NZ winning the match. LeoVegas odds, margin included, only reflects a 36.3% chance of a New Zealand victory.
Suppose we bet ₹10,000 on New Zealand as match-winner. What is our expected value on this bet?
Calculate Expected Value (EV) for a single bet by using the EV formula:
Since our potential profit is ₹17,500 (₹10,000 X 2.75 - ₹10,000) and our true chance of winning the bet is 40%, we can easily calculate our bet EV:
(₹17,500 X 40%) - (₹10,000 X 60%) = ₹1,000
Simply put, we can expect to make a ₹1,000 profit on average if we can place this bet numerous times.
Consistently finding value bets leads to long-term profits.
Why is a team favourite in a match? Because it's more likely to win, yes, but bookmakers know people like betting on favourites.
Therefore, they will make the odds lower than the true odds should be. This helps them avoid big liabilities on the favourite by making the price less attractive.
In our example, India are favourites. The truth is most bettors in India will back them regardless of the odds, and without considering the actual probability of them winning.
The best value bet opportunities typically present themselves on the outsider being too big a price.
Not considering the odds and the implied betting probabilities is a poor betting strategy - even if you agree the favourite will win.
Your bets should always be based on your assessment of the odds, meaning there will be many times you are not betting on who you think will win, but the team you think are over-priced to win.
This is one of the hardest things for new bettors to get their head around, but it’s crucial to be able to separate the heart from the head.
We suggest that you initially target secondary odds markets like Over Runs or Total Runs instead of a high volume cricket markets like the Match Winner.
The secondary markets are trickier for a bookmaker to price compared to a highly liquid market. On big betting sites, where most of the betting volume is staked on the match winner market, the collective opinion (wisdom of the crowd) means the odds are adjusted efficiently, taking any value out of the market.
The theory of cricket value betting relies upon accurately assessing all probability outcomes for the odds market related to your bet.
Constantly refuse to place bets with a negative expected value, and always follow a healthy bankroll management strategy. Pursuing the best cricket betting tips and strategies will pay off.
By strengthening your probability evaluation tactics, and mastering the best bankroll management practices, you are already on your way to being a consistent winner.