Expected Value (EV) in Sports Betting: What It Means and How to Use It to Your Advantage

Expected Value is a somewhat trendy term in sports gambling that is used frequently. Some bettors use it accurately, but many others use it to appear as experts; however, nobody should be too impressed when they hear this term.

Expected value comes down to practical application and simple understanding.

Also known as EV, expected value is used to measure the probability gap between a gambler’s expectations and the expectations of the sportsbook.

Oddsmakers assign the probability of a result and the expected wagering action through the betting lines. Those betting lines include moneylines, point spreads, totals, and other forms of sports gambling, such as futures and props.

Initially, the greater the odds, the more probable the outcome. For example, a +100 underdog is more likely to win the matchup than an underdog at +300.

What Is Expected Value in Sports Betting?

EV betting begins with implied probability. Implied probability is related to the odds that you see on the board.

If the Kansas City Chiefs are 10-point favorites against the Denver Broncos, the implied probability is a comfortable Chiefs win.

On the other hand, if the Dallas Cowboys are a 1-point underdog against the Philadelphia Eagles, the implied probability is a tight game that could go either way.

After a gambler reads the implied probability, he must measure that against what he believes to be the positive expected value.

When looking at our Cowboys vs. Eagles scenario, a gambler would assess the EV by calculating if the Cowboys or Eagles have a better chance of covering that opening spread and, if so, by what probability. The question comes down to whether Philadelphia or Dallas has a higher probability of covering the spread and by what percentage. What does EV mean in this case? Will it be a 55% chance or a 65% chance of success?

How to Calculate Expected Value (EV)

Calculating EV in sports betting is calculating the most probable outcome.

The calculation considers factors such as the teams’ abilities, recent form, lineup changes and injuries, and matchup history.

A major part of the calculation compares the actual price to what the lines and odds should be. Thus, the best gamblers will set their own lines first before reading the sportsbook line and then comparing the two. The more pronounced the difference between the gambler’s line and the house line, the greater the potential expected value for that wager.

Expected Value Formula

The formula to determine EV is not as complicated as many make it out to be. Specifically, the expected value formula is the probability of a win versus the potential profit or the probability of a loss against the stake.

The greater the potential profit and expected profitability, the more favorable the expected value is. Conversely, the smaller the probability and expected profit, the less expected value is offered.

EV Calculation Example

For example, let’s look at the odds for Major League Baseball.

In our example, the New York Yankees are priced at -178 on the moneyline, and the Boston Red Sox are getting +150. Now, let’s assume you’ve determined the true odds — or, the odds without calculating the vig — of the Red Sox winning are 45%, which correlates to odds of +122. Odds of +150 indicates value on your side, as it correlates to implied odds of 40%. Let’s also say you’re planning to wager $20 on this bet. Thus:

EV = (.45 * 30) – (.55 * 20) = 13.50 – 11.00 = 2.50 Expected Value.

Therefore, you have a positive expected value.

While it’s not a high profit in this example, those profits add up, and over time, if you’re correctly identifying +EV wagers, the money will add up, too.

You’ll see many sharp positive EV bettors place well over 300 bets in a month, and they'll need about six months of data before they can judge how they’re truly performing. In autumn, when multiple sports are played simultaneously, you’ll often see +EV bettors placing upwards of 500 wagers per month.

With positive expected value, you’re typically going to find that most advantages fall in the range of 1-3%.

While there are times you’ll find larger advantages, they’re uncommon. But when they are discovered, sharp bettors will fully exploit them. This is when +EV sharps typically make their largest plays, usually going for 3 to 4 units.

That said, you will see some who play a few 10-unit plays during the year.

The expected value shows how to attain the most favorable value.

Why Expected Value Matters in Sports Betting

Expected value is a sharp game. When assessing EV betting, the objective is to get the best possible price and the highest probable outcome for the maximum return. Thus, your knowledge of the teams isn't as important as the value of the bet.

Most of the casual sector doesn’t understand how EV betting works or simply ignores it.

Squares focus more on the teams, players, personalities, and media narratives involved in a matchup. Social media trends are more important to casuals than EV bettors. Squares chase erroneous information for the worst possible outcome; by contrast, sharps use EV to focus their gambling decisions for maximum value and returns.

EV is the actual value and the highest probable outcome compared to the value seen on the board. You're most likely to find value in the highest discrepancies.

Positive EV vs Negative EV Bets

A positive EV bet is a wager that, even if it loses, provides a higher return and less loss than what the odds indicate. When you find lines that offer higher positive EV, you will want to bet more on those to maximize profit.

Conversely, you want to avoid negative EV wagers. While it can be tempting to bet on those games, you’ll be laying more juice than you should. You'll also receive less profit with higher losses than the probable odds.

To find value in betting markets, you want to look at lines and determine the true probability. Calculate the implied probability and run the formula. If your expected return is positive, you’ve found a value bet. Weigh it against others you’ve found, and cash in on those with the highest differential.

Finding +EV Bets: Tips and Tools

Even if you’re just discovering EV betting, you should know that if you’re betting on positive EV most of the time, you’re much more likely to be successful.

Betting on lines you deem more profitable than expected, while avoiding those with poor returns, allows you to place bigger unit wagers and cash in on lines you correctly deem wrong.

Using EV can help you consistently make a profit. Not only will you be playing better lines, but you’ll also become more educated in spotting them and capitalizing on closing-line value.

Use Implied Probability to Spot Value

To determine the implied probability of a sports bet, you can use a formula similar to what was previously outlined here to convert the odds into percentage form. This tells you the likelihood of an outcome in relation to the other options, at least as far as the numbers are concerned.

Implied probability can help you place the odds in a better perspective and improve your overall understanding of betting markets.

Track Closing Line Value (CLV)

Tracking closing line value (CLV) is simpler than you may think.

First, record the odds when you place your bet. Next, before the game starts, check the closing line at a sharp sportsbook such as Prime Sportsbook. Finally, compare the two numbers — if your bet had better odds than the closing line, you had positive CLV.

While individual bets will always vary, consistently beating the closing line is a sign that you have an edge over the market.