Understanding Expected Value in Betting

Expected value (EV) is an important idea to know about when it comes to sports betting and gambling. It helps us make smarter choices by showing us what we can expect to win or lose on average when we place a bet. Let’s break it down in simple terms!

What is Expected Value?

Expected value is the average result of all possible outcomes. It shows how much money we might win or lose based on the chances of different results when we place a bet.

How to Calculate Expected Value

To find the expected value, you can use this easy formula:

EV = (P(W) × A(W)) - (P(L) × A(L))

Here’s what the letters mean:

• P(W) = Probability of winning
• A(W) = Amount you win if you bet
• P(L) = Probability of losing
• A(L) = Amount you lose if you bet

Example in Sports Betting

Let’s say you are betting on a football game. The odds say you have a 50% chance to win $100 (that’s your profit). You also have a 50$50 bet.

Using the formula:

• P(W) = 0.5 (50% chance to win)
• A(W) = 100 (you win $100)
• P(L) = 0.5 (50% chance to lose)
• A(L) = 50 (you lose $50)

Now, let’s plug these numbers into the formula:

EV = (0.5 × 100) - (0.5 × 50) EV = 50 - 25 EV = 25

This means, on average, you can expect to gain $25 from this bet.

Conclusion

Understanding expected value helps you look past just winning or losing in the short term. It encourages a better way to bet, reminding us that careful and logical betting based on EV can increase your chances of winning over time. Good luck with your betting!