When value betting, the actual value is shown as a percentage number. How is this value calculated?
Some bookmakers have odds that are very close to the true probability of a match.
How can we tell? We compare their closing odds to the actual match result. Do this for tens of thousands of odds, and you can tell what bookmakers (and their customers) are best at predictions. These bookmakers are called sharps.
We evaluate several of these sharp bookmaker odds (we call them the true odds), taking betting bias and market efficiency into account. Our servers can then compare the true odds with other bookmakers. (Up to a million odds from 90 bookmakers every 60 seconds). If a bookmaker has higher odds than the true odds, we have found a value bet.
I’ve actually been very curious about this subject. Simon, could you explain a few things for me?
How do you take betting bias and market efficiency into account? Do you know how much people are betting? Or do draw conclusions from the movement of the odds?
I’ve read on Pinnacle that their odds are much closer to true probability when the game is about to start. Does this mean that value bets become more valuable as you approach game day?
Betting bias is already weighted into the odds and the margins of sharp bookmakers. For example, underdogs frequently get worse odds than what the probability implies, and favorites are overpriced. This has been studied and proven. You can read up on the favourite-longshot bias.
It’s very important to take this into account when value betting, and our ValueBetting service helps you with that.
We don’t factor in the market depth yet, but will in the future.
You could say that. At least you can be more confident in the value percentage prediction.
It is my feeling that there is a betting bias towards overs, which leaves value on unders. Do you share this opinion? If yes, do you take it into account for your betting bias?
If there is such a bias, it is taken into account, yes.
It’s important to understand that we (RebelBetting) don’t calculate any betting bias ourselves. It’s already factored into the odds of the sharpest bookmakers. And they are much better at this than anyone else in the world.
The challenge is then to separate the margin from their true odds, which is then used to display the value.