The concept of expected value is used peppered
throughout gambling because it quantifies your rate of losing (or winning) by
gambling on any event. Las Vegas uses this concept to determine the payouts of
their games so that the house has an advantage and astute gamblers like us use
it to test how great our
sports betting
systems are.
The truth about casino or card games is that
there exists no system out there that will allow you to beat the house, at least
not reliably. The payouts are created such that the expected value return on
your bet is negative for you. One caveat to that is that there does exist an
optimal strategy for video poker that has a positive rate of return but it takes
several months to expect to achieve that. And besides, the optimal strategy is
all about losing a lot of certain games in an attempt to win the big prize,
something that takes a lot of effort and patience to learn.
The difference between casino games and sporting
events is that you can achieve a positive E[x] with successful handicapping.
Since the outcomes are not predetermined.
Application to Betting Systems
For sports betting, the equation for betting:
E[x] = Pw*WA + (1-Pw)*RA
- WA = Win Amount
- RA = Risk Amount
- Pw = Probability of Winning
- 1-Pw = Probability of Losing
You can check out Mathworld's
definition of
expected value.
WA/RA Calculation
The odds of favorites are negative values while
the underdogs are positive values.
When betting on favorites, the risk amount is
defined as the absolute value of the odds and the win amount would be 100. When
betting on underdogs, the risk amount is 100, and the win amount is equal to the
odds.
Pw
As you can see, the more you risk, the higher
your probability of winning needs to be. The probability that corresponds to an
expected value of exactly 0 for a given odds is called the break-even percentage.
Since sports betting systems are calculated over a wide range of odds, we
average out the expected value of all the games within a betting system sample
as a means of quantifying how good it is.
The E[x] is also a pretty convenient means of
identifying what the true odds of a sporting event should be. In general, it is
advisable that you look for betting systems with an expected rate of return that
is 20 cents on the dollar. This means that the odds should be shifted about 20
points. We say this because the performance of any betting system in the past
can not 100% be attributable to the future.
Odds
Sporting event odds are formulated for
baseball,
football,
tennis,
basketball,
boxing,
golf,
horses,
hockey, and
motor racing
as well as other fringe sports.
Picks
Many sites offer
free baseball picks
or free football picks that are
developed using the concept of systems.