# What Is Value

(Last Updated On: May 10, 2012)

I received an email from a reader last month that prompted me to write a series of articles this month that focus on value in odds and the reasons for its importance. Without value in odds it is impossible to make a profit. This is not just me giving my opinion but a mathematical fact and if you can understand the concepts of it then you are going to be in a very strong position.

The series will consist of 4 articles which will, I hope, give not only the basics of value but also detail into the mathematics behind it in such a way that is easily understandable.

Over the next 4 weeks these articles will be broken into…

• What Is Value (this week!)
• The Difference Between Planned Value and Default Value
• Understanding The Maths Behind Value
• Breaking Down A Profitable Bettor

I expect these articles to start some big discussions on the concept of odds value so please jump in and let me know what you think or ask a question by leaving a comment at the bottom of the page.

So, today we are looking at what value is for us as bettors. Finding value in the odds is at the core of all successful bettors whether they realise it or not, we shall look at this more next week, and without it then we could not be profitable.

Let’s start right at the beginning so that we can see the whole value odds picture!

When we place a bet we do it with either the bookmaker or a betting exchange. The odds available are dictated, to the most part, by the general public who are betting on the race. There are of course other factors involved as well with both bookmakers and betting exchanges but this article is not looking into these small variations. For our purposes all we need to know is that the odds available to us are dictated by the general betting public.

Odds are not just the amount that you are going to be returned, they also indicate the probability of a horse winning the race. Probability is percentage divided by 100, therefore if we multiple the probability by 100 we get the percentage chance for the horse winning the race. To work out the chance the general betting public think a horse has of winning, we take the decimal odds, e.g. 3.75 divide 1 by this number…

1 divided 3.5 = 0.29

If we then want to change this into a percentage we multiply it by 100…

0.29 multiplied by 100 = 29%

This tells us that not only are the general betting public dictating the odds, they are also telling us the chance they think each horse has of winning the race. History shows us that they are very accurate at doing this. For example, the favourite horse, which is the horse the general betting public thinks has the highest chance of winning, wins the most often.

So we now know that the general betting public dictates the odds and gives us an accurate assessment of a horses chance of winning the race.

You may be thinking, well that is easy then, we always bet on the favourite to win if it has the most chance of winning the race. Unfortunately it is not that easy, and those of you who have tried will realise that doing this is a quick way to becoming broke.

How come, if we bet on the horse that wins most often we still end up losing?

Because there is no value in betting on those odds. Every single person in the general betting public knows that this horse is the most likely to win the race, we have no edge!

In that case, what should we bet on?

As profitable bettors we have to be patient, something the general betting public is not. Everything and everybody makes a mistake sometimes, and this is no different to the general betting public. When they make their mistake we jump in and place our bets because we will be getting value in the odds.

An example of a mistake is when the second favourite horse should actually be the favourite. This means that the odds are higher than they should be and are offering value.

This explanation allows us to determine value as…

‘The moment when the general betting public incorrectly assess the probability of a horse winning the race.’

I have purposefully stayed away from the maths behind value odds and how they prove that it is necessary to have to make a profit as I will be covering that in a couple of weeks.

### Michael Wilding

Michael started the Race Advisor in 2009 to help bettors become long-term profitable. After writing hundreds of articles I started to build software that contained my personal ratings. The Race Advisor has more factors for UK horse racing than any other site, and we pride ourselves on creating tools and strategies that are unique, and allow you to make a long-term profit without the need for tipsters. You can also check out my personal blog or my personal Instagram account.

1. Stephanie says:

I think that your idea of expliring value is a good idea. I found your article an interesting start.

Thank you

I hope you find the others as useful.

1. Ed says:

Brilliant article Michael. You are so right about only making a profit by understanding value. It is the ONLY thing that I use in order to profit from my racing as you’ll know.

I always compare value by equating the concept to something we would buy at a supermarket.

By converting the odds into a percentage i.e from your example above 3.5 (I personally just divide a 100 by the decimal price) divided by 1, we arrive at 29% (a 5/2 shot). If I were able to get 3/1 about this horse (3 divided by 1 plus 1= 4 therefore a 100 divided by 4 =25%) I would be betting at 25%.

So in the supermarket scenario we have a product valued at 29. If we can get the same product for 25 we have a saving if that makes sense?

Looking forward to the next article.

Cheers,

Ed

2. why not break racing post tissue down to 100%

its so easy
8 runner race is probably be overound to 116%
thats 2% on each runner

if your choice of horse is RP tissue 6/4 the add 16% to your pick and its now a value bet because you have made the overound from 116% to 100%

2. Pete says:

A good start and easy to follow – Ist question… How, why and When do you think the 2nd Fav should be fav?

Thank you. It is very dependent on the race and I would normally work off my own odds line, however you could also do this by profiling races and finding those that the public et it wrong in.

3. Kuldip says:

I agree if you bet on the odds-on fav all the time like a zombie, you will loose, but if you take into account that the public are led by the ring in their nose by the bookies to bet on the fav then you will end up poor. If like Mr Disney u do the opposite to the general public u will make money. I am very selective on fav, if you choose the correct ones not fav that shorten in price because jocks like Mccoy are on them, the horse has no form and all of a sudden it is as low as 1/3, and as you say the 2nd fav should be the fav and it happens to be 7/2 ching! instant profit.

4. The maths is essential to understanding value, so I look forward to the article on this.

I bet for value on the football markets and have been making a decent profit from this for a while now. It would be more interested to see how you calculate what you perceive to be the correct %chance for each horse to make a comparison with the odds on offer.

Great to hear you are doing well on football. I am not going to get into odds line creation techniques in this series but have put down to write articles on this as well.

5. Ian says:

That is fine if you know for sure that itβs a false favourite, How do you know or is this to be coved in the next few blogs.

Regards Ian

This series is about understanding value, finding false favourites I shall write some separate articles on.

6. Steve M says:

Every race that I evaluate I work out the probability of each horses chances based upon my ratings and then convert the probabilty to odds effectively making my own betting market.

From this you can find the value horses in each race which more often than not are not the highest rated or shortest prices in the betting market.

I am sure you will be amazed by the number of horses that win at a bigger price than they really should be!

Sounds like you have this sorted π

7. Raymond says:

How do we know when the public has picked
the wrong horse ?

You are not the first to ask this, I shall write some articles about it.

8. Mr L Duncan says:

Maths would have been helpful as 0. 2587 and 25.7% is what I got, rounding up to 26% which is 3% out.
Please if you are going to avoid maths, do so and not give incorrect examples as I am already very confused by Race Advisor.
Which is full of good things but I appear to be paying double or treble. Some how Value takes on a different meaning.
I am a member of Puntology
I am not sure how much I am paying for Race Advisor but if I am paying for contenders and puntology Then some thing is going wrong! I thought if I am paying for Race Advisor contenders, they were part of ‘Todays Races’ and not a separate Β£29.99.
Value each month is less what I pay out. This is now putting my calculations out. So your 3% is just adding confusion.

1. GM says:

huh!
You should recalculate. 1 divided by 3.5 definitely makes 0.2857 making 29% as Michael says.
Looking at your figures it seems like you just misplaced the numbers 5 and 8 in your calculation.
better do it again or change the calculator π cheers

1. Yes I agree I did misplace the figures. 5 & 8. However as for a New Calculator I get the correct answer on my PC calculator but not on my Laptop Calculator yesterday. Windows 7 on both so I will not be buying a new Calculator as they come free with Computer’s now adays.

I must have made a type ‘0’ error as you rightly say I do own a very good Texas instruments calculator which has served me well since the early 1980’s I also have a very good one on my I phone 4s So I was wrong due to a type error GIGO it is called Garbage in = Garbage out.

I thought it was probably a typo, easily done π

2. Erm…1 divided by 3.5 is 0.2857 = 29%, which is the example given… My advice – get a new calculator.

Liam it sounds like you may have got the calculation wrong, please try doing 1 divided 3.5 again. Please send the other queries via email as the comments section is not the place to do support issues.

9. keith says:

How do we know when this has hapened

I will write some articles about finding false favourites π

10. Chridtopher Scott says:

We are all aware that 2 out of 3 favorite’s do infact lose, however favorite’s do have the highest strike rate at just 33%. So if we Were to back all favorite’s, we would lose. If we Were to lay all favorite’s we would also lose. Those pesky bookmakers are pretty good at maths. π

11. Greg says:

Would you agree that the, “Place Market” offers value and if so, how do I back a runner in the place market as opposed to Eachway. I am not sure whether online bookies and exchanges offer this bet?

I would most definitely agree, I even have a strategy based on this in the members area. Exchanges offer the place bet and a lot of bookmakers in the UK are now offering it as well.

Not just a waste of time but costly as well!

12. reg says:

i think the easiest way to get value

take racing post tissue say horse is 6/4 if you get
13/8 then imo thats value

or another way is break the tissue down

say 8 runner race add 2% for each horse again tkaking 6/4 becomes valu if get 1.62

the reason its value, you have made the tissue down from 116% to 100%

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