Would you buy something for £10 knowing full well that you could sell it for £15 twenty minutes later? Of course you would. Well this is exactly what is meant by “Value Betting”.
It is very difficult to spot a Value Bet. To obtain value in betting we need to know the True or Fair odds of a competitor and then we can decide if the odds on offer are better. If we can get better odds then we have found a value bet.
But how does this help us in our quest for profit.
Let’s say we take 100 competitors at True odds of even money (2.00), then we back them all for £10 and see what happens.
Well because the True odds are even money (2.00) , or to put it another way each competitor has a true 50% chance of winning, out of 100 races, 50 of them would win and 50 would lose. At £10 stakes we would win £500, but we would also lose £500. As you can see we are back where we started.
However, if the True odds were even money (2.00) but we could back the competitors at 11/10 (2.10) what would happen then? We would win £550 (£11 * 50) and lose the same £500. Making a nice £50 profit.
The problem most punters face is evaluating the True odds of a competitor. Faced with all the information freely available to punters these days it is extremely hard to gauge a competitors True odds, or is it?
Betfair is a melting pot of every punters opinion who is having a bet on an event. All these opinions come together to form the most efficient betting market in the world. (check The efficiency of the betting exchange markets for an in depth explanation of this). This efficiency means the odds on offer at Betfair are more or less the exact True odds of a competitor winning an event.
You might think that we could make money on Betfair by simply betting blindly on every favourite but you would be wrong. What would happen in practise is that you would break even, BUT then you would lose by having to pay the 5% commission to Betfair (the Broker) on the winning selections.
You can still obtain Value on Betfair, but I suspect these days that real Value will only be found when betting early before the majority of punters have placed their bets or by betting In Running. But that is a subject for another article.