Find positive expected value prices at Australian bookmakers

Every price implies a probability: divide 1 by the decimal odds. $2.00 implies a 50% chance, $4.00 implies 25% and $1.50 about 67%.

Expected value (EV) is what a bet returns on average if you could place it again and again: the chance it wins, times what it pays, minus the stake. When the real chance of winning is higher than the price implies, that average is positive and the bet is positive EV, or +EV. Value betting is another name for the same idea.

The catch is that nobody knows the real chance. What you can estimate is the fair price: what the market as a whole says an outcome is worth once the bookmakers' margin is taken out. +EV betting means only taking prices that are longer than that fair price.

Edge, in one line

Edge is how far a price sits above fair: edge = offered price ÷ fair price − 1. A $2.10 price on an outcome with a fair price of $2.00 has a 5% edge. On a $100 stake that is worth $5 on average, and only on average: any one bet either wins $110 or loses $100.

Bookmakers build a margin into their prices, so the probabilities a market implies add up to more than 100%. The excess is the overround. Price both sides of a two-way market at $1.90 and each side implies 52.6%: together, 105.3%.

Taking that margin out is called de-vigging. The simplest method scales every implied probability down by the same factor until the market adds up to exactly 100%. Other methods take more of the margin off the longer-priced outcomes, because bookmakers tend to shade longshots more than favourites. On an evenly matched market every method gives the same answer; with a short favourite and a longshot they can disagree about the longshot.

One bookmaker's de-vigged price is only one opinion, so a better fair price combines many:

• Sports: the screener takes the margin out of prices across the market, including exchanges and global market references, and combines them into one fair price for each selection.
• Racing: the reference is the Betfair exchange, where punters back and lay against each other and the exchange charges commission instead of building a margin into its prices. A bookmaker win price above Betfair's for the same runner points to an edge.

A fair price is still an estimate, and the fewer prices behind it, the weaker it is. When one bookmaker's price sits far from everyone else's, a stale or mistaken quote is often a likelier story than a real edge.

The whole calculation on a simple two-way market, such as a line bet with both sides priced at $1.90. The prices are illustrative, not a live market.

An edge is an average over many bets. The $2.10 bet above loses half the time, and the extra 5% only shows up over a long run. Even if the fair price is exactly right, flat $100 bets on that 5% edge still leave you behind:

• after 10 bets, about 38% of the time;
• after 100 bets, about 31% of the time;
• after 1,000 bets, about 7% of the time.

Losing runs are normal as well. Over 100 bets that each win half the time, a run of five or more losses in a row happens about four times in five.

Real results swing more than this. The fair price is an estimate, so some edges are smaller than they look or not there at all, and prices move, so the price you get can be worse than the one you saw.

Judge the prices, not the results

Because a few hundred results say so little, a quicker check is closing line value: whether the prices you took beat the final price before the start. Prices that regularly beat the close are a sign they were genuinely above fair. The Terminal keeps price history (flucs) and closing lines, so you can check.

Sizing stakes: the Kelly criterion

The Kelly criterion sizes a bet from its edge and its odds: stake = edge ÷ (decimal odds − 1), as a share of your bankroll. For the example above that is 5% ÷ 1.10, about 4.5% of the bankroll. A common approach is to stake a fraction of that, such as a quarter or a half, because full Kelly assumes the fair price is exact and swings hard when it is not. Whatever the method, only stake money you can afford to lose.

A screener finds prices; someone still has to place the bet before the price moves. For racing, B337 can do that part. The racing bot, a strategy called Classic Racing, is a value betting bot you control: it watches races close to the jump, compares each bookmaker's win price with the Betfair exchange price and places a bet in your own account when the price shows positive expected value.

It covers thoroughbred, harness and greyhound racing, and you set the rules: how far ahead it looks, which race types and countries, the odds range, the minimum edge, maximum stakes and the times it runs, with optional profit and loss limits that stop a session. It runs on your own computer, logs in to bookmaker accounts you already hold, and records every bet, price and settlement in your dashboard. More on the horse racing betting bot page.

It suits you if

• you already hold accounts with several Australian bookmakers and want the out-of-line prices in one place, not one website at a time;
• you are comfortable with losing runs and judge an approach over hundreds of bets, not a weekend;
• you like records: bets placed through B337 settle automatically, and the results and P&L views export to CSV;
• you bet on racing and want software you control to place +EV bets in your own accounts.

It is not for you if

• you want certainty. There is none: the edge is an average, and many +EV bets lose;
• you are chasing losses or betting money you need for other things. For free and confidential support call 1800 858 858 or visit gamblinghelponline.org.au;
• you are not prepared for a bookmaker to restrict your account. Bookmakers can restrict or close accounts at their discretion, and +EV betting does not change that.