What is the Expected Value (EV) & How is it Calculated?
What is the Expected Value (EV) in Sports Betting? - How to Calculate the EV
Expected value, often abbreviated to EV, is a key sports betting concept that will help you choose the right bets to place. When looking at the odds at Stake Sportsbook, you should be able to think in terms of expected value and whether the odds offer you positive or negative value. In this guide, we’ll explain what EV is, how to calculate it and how it will help you have a better success rate.
How is the EV Calculated & What Does it Mean?
When betting on sports, you want to always find a bet that will give you the highest possible chance of winning. Expected value is the measure of how much you might expect to win or lose when taking the same bet many times. Probability affects your chances of winning, and sometimes you might get lucky or unlucky. However, over a long period of time, your profits will always depend on the expected value of the bets you make.
Let’s look at flipping a coin as an example. A coin flip is a 50/50 result, so you would expect the odds to be even. If the odds are higher, we describe this as being positive expected value (+EV), and you’re guaranteed to make a profit in the long term. However, you’ll always expect to make a loss eventually if they’re lower than even and you keep betting. This is known as negative expected value (-EV).
How to Calculate the EV & Formula
You calculate the expected value by multiplying the probability of winning by the profit won from the bet and then subtracting the probability of losing multiplied by your stake. Here’s the simple formula:
EV = (probability of winning x potential profit) - (probability of losing x total stake)
Going back to the example of the coin toss, let’s imagine a sportsbook offers betting odds of -120 for correctly guessing the outcome. Let’s calculate the EV if you choose to take these odds and bet $10:
EV = (50 x 8.3) – (50 x 10) = -60
In this case, you might win from your guess, but over time, you would lose money as the expected value is negative.
Calculating the EV requires you to have an accurate idea of the true probability of the outcome. Naturally, this is difficult to measure. Sometimes, the oddsmakers may get the probabilities wrong. Maybe they’ve overestimated the ability of a particular team or underestimated an underdog.
What are Positive and Negative Expected Values?
Positive expected value is when the result of the EV calculation is a positive number. In other words, the probability of winning multiplied by the potential profits has to be larger than the probability of losing by the total stake. If you place bets at positive expected value, you’re much more likely to end up in profit over time.
On the other hand, negative expected values mean that the probability of losing times the total stake is higher than the probability of winning multiplied by the potential profit. If you’re betting at negative expected value, you’re much more likely to end up at a loss over time.
Professional sports bettors look for the positive expected value when checking the odds and deciding where to bet. Even if they lose from time to time due to bad luck, consistently betting at +EV means they have a better chance of being a profitable bettor.
Advantages of Calculating the EV When Betting on Sports
The main advantage of calculating EV is that it helps you determine where to bet. While you can always get lucky by making bad bets, you should be looking to give yourself every possible advantage.
Margins in sports can be very thin as the vig is always present. Knowing which bets have positive and negative expected value will help you gain an edge.
Betting on +EV outcomes won’t guarantee you a win, but experienced bettors know that over time it improves the chances of making a profit.
Why Should You Choose Stake Sportsbook?
Stake Sportsbook offers great odds on all your favourite sports, and it’s easier than ever to find +EV betting opportunities thanks to our huge range of betting markets, such as moneyline, props, spreads, over/under totals, outrights, and more. On top of this, we provide stats on live and pre-live games to help you work out the likely probabilities and calculate the EV of your bets. Of course, there are plenty of promotions available too, which are one of the best ways to increase expected value and long-term success when placing sports bets.
Betting Tips & Strategy
Bet early – The best value is often found when the odds first come out. Occasionally, the sportsbooks will make errors in the betting lines, and this presents an excellent opportunity for sharp sports bettors. Do your research before the markets go live, allowing you to find the best EV before anyone else.
Watch for line movement – Odds will move around a lot in the buildup to a game as bettors place wagers. Online sportsbooks often aim to have even money on both sides of the line, and the odds will change to encourage or discourage bets. Once again, this opens up opportunities for improved value.
Make the most of promotions – Sports betting promotions can increase your odds and decrease the amount you need to stake. Naturally, this has a big difference on EV, leading to better results. Make the most of available promotions when possible to increase expected value.
Don’t let bias cloud your judgement – It’s hard to be objective as a sports fan sometimes, as there are always teams we love and those we love to hate. However, you need to be able to critically assess the probability of outcomes, and bias for your favourite teams can affect your ability to calculate the EV. Make use of the stats and choose betting strategies carefully.
Sports Promotions, VIP Club & Responsible Gambling
There are lots of great promotions available at Stake, helping to improve your EV and have more fun while betting on your favourite sports. If you’re a regular bettor, you can even join our VIP club, which offers extra special rewards. Learn more about perks like VIP hosts, rakeback and reload bonuses on our VIP Club FAQs.
However you choose to bet, ensure you’re always staying within your limits and not getting carried away. Please utilise our budget setting calculator designed to help you stay Stake Smart. You can read our responsible gambling guide for more information and find support if you need it.
