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What is a Value Bet? (+How it Works)

Understanding that there are bets you should take and bets you shouldn’t take is the first step towards becoming a profitable bettor. Value bets make you money, the others don’t. It’s almost as simple as that.

🎓 Getting Started
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What is a Value Bet? (+How it Works)
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What Is a Value Bet? (+ How It Works)

[Already know what a value bet is? Skip to Getting Started #02 and learn how to find value bets using the dropping odds strategy]

Quick Summary

Value betting is the key to long-term success in sports betting. This guide explains what a value bet is, how to calculate expected value, and why consistently betting with an edge leads to profit. With clear examples and simple math, you’ll understand how to bet smarter.

What is a Value Bet?

A value bet is a mathematically profitable bet. A value bet occurs when the odds taken imply a lower probability than the real probability of an outcome. It’s a mathematically profitable spot, commonly referred to as a +EV (expected value) bet.
Here’s why value betting works:
  • The goal isn’t to win every time, it’s to beat the odds consistently
  • It relies on long-term results, not short-term luck
  • You're exploiting market inefficiencies before they correct
Unlike an arbitrage bet you are not guaranteed to make money on any one value bet but over a statistically significant sample size you are almost guaranteed to profit from consistently placing value bets.

Value Bet: Coin Flip 🪙

We all know a fair coin has a 50% chance of landing on heads and a 50% chance of landing on tails when flipped.

Calculating Expected Value: First Attempt

Now let’s imagine your friend has offered you odds of -120 (1.83) for the coin landing on heads. What we need to do is figure out whether this is a value bet or not, if it is then we should accept his offer if it isn’t then we shouldn’t.
A value bet will have what we call in maths positive expected value and a non value bet will have neutral or negative expected value bet. Here is the formula for expected value:
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Expected Value = (Probability Of Winning x Profit) - (Probability Of Losing x Stake)
Calculating the Expected Value
So, let’s imagine for a second that we accepted our friend's offer and placed a $10 bet on the odds of -120 (1.83). What is the expected value of the bet?
We know the probability of the bet winning (landing on heads) is 50% because the coin is fair so we would input:
(0.50 x profit) - (Probability Of Losing x Stake)
Calculating the Profit of the Bet Using American Odds
The next step, which is calculating the profit of the bet, can be a bit confusing when using American odds. The formula is slightly different depending on whether the pick is a favorite (-) or an underdog (+).
Here’s how you go about each:
Determine the sign before the odd: + or -
For an underdog (+):
  • Divide the stake by 100
  • Multiply the result by the odds to calculate the profit
For a favorite (-):
  • Divide 100 by the odds
  • Multiply the result by the stake — that's the profit
So let’s get back to our bet and calculate the profit using what we’ve learned above. Remember we’ve been offered underdog odds so we need to divide the stake by 100 and then multiply the result by the odds:
(100/-120) x $10 = $8.33
Now we know the profit we can input it into our expected value formula:
(0.50 x $8.33) - (Probability Of Losing x Stake)
Calculating the Probability of Losing
The next input to calculate is the probability of losing, again we know that the coin is fair so the probability of it landing on tails and therefore us losing the bet is 50% so we can go ahead and input that:
(0.50 x $8.33) - (0.50 x Stake)
The last input is our stake, if you remember we staked $10 so let’s finish off the calculation with that input:
(0.50 x $8.33) - (0.50 x $10)
= -0.84 (-$0.84)
Oh no! This bet has a negative expected value of -$0.84 meaning we would expect to lose that much per bet if we placed it over and over again. Luckily we took the time to calculate the expected before placing the bet for real.

Counter Offer: What If the Odds Were +120?

Now we know not to accept the bet at odds of -120 (1.83) let’s imagine we counter offer our friend with odds of +120 (2.2) and he accepts. Would this be a value bet for us?
(0.50 x 12) - (0.50 x 10)
= +1.00 (+$1.00)
Yay! The expected value is +$1.00 meaning we would expect to profit $1.00 off each bet if we placed it over and over again.
Unfortunately the reality is you won’t be able to find any value bets on coin flips because that would be too easy! You can however find plenty of value bets on sports. Popular sportsbooks like Bet365, DraftKings and Fanduel often accidentally offer bets that have positive expected value for the player (i’ll show you exactly how to identify these bets in the next guide). The math is exactly the same it’s just the context is different. Let’s now look at an example of a value sports bet.

Value Bet: Sports Bet 🏈

As we already know we need to know the probability of the bet winning in order to calculate expected value. As a reminder here is the expected value formula:
(Probability Of Winning x Profit) - (Probability Of Losing x Stake)
Calculating probabilities was very simple for our coin flip example because we know that a fair coin lands on heads 50% of the time and tails 50% of the time. It is not so easy when it comes to sports bets because the true probability of an event occurring like Manchester City winning is much harder to calculate.
For the sake of staying on track let’s just assume we know for sure that the probability of Kansas City beating the Atlanta Falcons is 55%. Below you will see that Bet365 are offering us odds of -105 (1.95) which have an implied probability of 51.20%.
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Let’s calculate the expected value of a $10 bet at Bet365’s odds of -105 (1.95) using our assumption that Kansas City have a 55% chance of winning:
(0.55 x $9.52) - (0.45 x $10)
= + 0.74 (+ $0.74)
Bet365 is unknowingly offering us a value bet so we should take them up on the offer by placing a bet!

Why This Is a Value Bet

You might be thinking that “that’s all well and good but how am I suppose to calculate the true probability of Kansas City beating Atlanta doesn’t that require a bunch of data and complex calculations?” You might also be thinking “no bookmaker is ever going to be dumb enough to offer me value bets!”
You would be wrong in both instances, you don’t need to do any data crunching and you would be surprised how often bookmakers get things wrong.
Note: All odds examples use both American (-120) and Decimal (1.83) formats for clarity. When using POD, you can set your preferred odds format from your settings toolbar.

Why Value Bets Matter in the Long Run

Value betting is not about winning every bet. In fact, even profitable bettors can lose several bets in a row. What makes value betting effective is consistency and volume over time.
In the short term, results are influenced by variance. You might win or lose due to luck. But over the long run, if your bets have positive expected value (+EV), the math will work in your favor.
Here’s why long-term thinking matters:
  • Short-term losses are normal and expected
  • Profitability comes from placing many +EV bets, not just a few
  • You can lose more bets than you win and still make money
  • Long-term results reflect the quality of your edge, not streaks
Think of it like a casino. Each game has a small edge, and over time, the house always wins. With value betting, you become the house.
Track your bets, stay consistent, and let the edge do the work.

Putting Value Betting into Action

So far, we’ve explained what value betting is alongside real-world examples to help you understand how it works.
Value betting is not about luck or gut feelings, it is about math. It is a numbers game built on long-term discipline and consistent decision-making. You will not win every bet, and that is okay. What matters is betting when the odds are in your favor and the expected value is positive.
The more +EV bets you place, the more your edge shows over time.
Ready to start finding real value bets? Read the next article on this guide series - Getting Started #2: How to find value bets using the dropping odds value betting strategy.
Here, you’ll be taken through exactly how to find value bets without having to do any complex maths using the dropping odds strategy.

FAQs About Value Betting

Next, let’s answer some common questions new bettors ask when starting with value betting.

Can I Lose Money Even if My Bets Have Value?

Yes. Value betting is not about winning every bet. It is about making bets that are expected to be profitable over time. In the short term, you may still lose money due to natural variance. That is why a long-term mindset and good bankroll management are essential.

Do I Need to Win more than half My Bets to be Profitable?

No. You can win less than 50 percent of your bets and still make money if the odds offer enough value. For example, if you consistently bet on outcomes priced higher than their true probability, your profits will add up over time.

How Do I Know If a Bet Has Positive Expected Value?

You are looking for odds that underestimate the real chance of something happening. If the true probability is higher than what the odds suggest, the bet has value. You can estimate this with basic research or by using tools that track market shifts and pricing mistakes.
Yes. Value betting is legal wherever sports betting is legal. It is simply the process of identifying and betting on odds that offer better returns than the true likelihood of the outcome. There is nothing unethical or risky about the strategy itself.

Is It Better to Place a Few Large Bets or Many Smaller Ones?

Many smaller bets are better than a few large ones. This helps smooth out variance and gives your edge time to show. Value betting works best when applied over a high volume of bets. It also protects your bankroll from heavy losses during short-term downswings.

Will my Account Be Restricted by Bookmakers?

If you do it right then yes. Most sportsbooks limit sharp bettors who consistently place value bets but that doesn’t mean you shouldn’t make what you can off the sportsbooks while your accounts are unlimited.

How Long Does It Take to See Results?

Value betting is a long-term strategy, and due to variance, short-term results can fluctuate. Most bettors begin to see their edge after placing several hundred value bets.
 
Have a question we didn’t answer? Let us know and we’ll include it in future guides.
 

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