The Edge, Expectations & Value

Last week we looked at Gambler or Investor and the differences between them. This week in our ongoing quest of making a living from football betting, we are going to look at the Edge, Expectations and Value.

The Edge

When it comes to sports betting, everyone talks about “the edge”. “You’ve got to have the edge” or “you can’t win without the edge”. The thing is, from where do we get this mystical edge.

Before we start, the Bookmakers already have the edge over us with their overrounds, so in real terms we have to find 2 edges. One just to get back to a level playing field and another to get in front of the books.

My definition of having an edge:-

You have an edge when the system, method or software you are using, produces a decent profit over a sustained length of time.

This then begs other questions. What do you call a decent profit? and how long is a sustained length of time?

In football parlance, I class a decent profit as 10% return on investment. I class a sustained length of time as one full football season.

There are no right or wrong ways to finding an edge, it is down to the individual, what works for them is the correct for them but may not be right for someone else.

Some possible approaches for finding an edge:-

1. Statistical analysis - using ratings systems based on past performances to predict outcomes
2. Information overload - perusing sports papers and internet sites for up to date information
3. Subjective assessment - using your own knowledge and feel for the game
4. Subscriptions - either to advisory services or buying off the shelf systems

These are all valid ways of finding an edge but the main aim of them all is to find the value in a bet.

Expectations

We have seen in last weeks’ “making a living from football betting” post, that the first goal, pardon the pun, for a football investor is not to make a loss. This in itself is no mean achievement because we have also seen that the bookmakers have an in-built advantage of around 8% on all football betting match odds. The first mistake most people make when they first try to beat the bookies is to expect too much.

The only way forward is to down play early expectations and settling for a break-even figure at the start is good thinking. It means that you have already turned round an 8% deficit and by doing this, have shown that you have an edge over the books.

One of the modern day great gamblers, Harry Findlay, doubts if anyone can turn a 10% ROI over a long period. You certainly have to work hard at it and to be successful you must treat it as a business rather than a hobby. Once you have got to the break-even point, the next milestone is to hit 10%ROI, this is the holy graille as far as betting goes. If you can hit 10% on football betting you are doing very well 15% is outstanding and 20% is virtually unheard of.

So early doors, temper your expectations, build on them gradually and as your bank increases so will your expectations.

Value

Value is the difference in price between what the bookmaker is offering and what you perceive to be the correct odds for that match. So the bookmaker is offering odds of 5/4 for a home win in a particular football match and from your own ratings/system/method/software, whichever one you use, you have identified that evens would be a fair price, then you have got value by taking the 5/4.

Value betting is the only way to win at this game. Value for me is everything. Anyone who knows me, can be sure that when I place a bet, there is a value element in there. When I place a bet on a match, I never even think about who is going to win that match. Who is going to win the match is totally irrelevant to me, value is the important thing. Winners do not necessarily make you a profit. If 80% of your bets won but you were backing them at 1/5, you would make a loss. Only value winners make you a profit.

When assessing a match, I am not looking at who will win that game, I am looking at who is the value in that game. Sometimes the value bet is the favourite, sometimes it is the underdog but whoever it is, that is where my money will go because we all should know that making value bets is the only way to prosper over the long term.

On a typical weekend there will be 46 league games in the top 4 divisions in England. Out of those 46 games, probably about 40 of them will offer some value on one team or the other. Some value may only be marginal but others may have substantial value and it is these with substantial value that I look for in particuar. I normally end up with between 5 and 10 selections each weekend. As Geoff Harvey says in his book Successful Football Betting, “find the value and the winners will take care of themselves“.

The way in which I find my edge is through statistical analysis rather than instinct, which can sometimes let you down. There are any number of these ratings systems that you can use or you can even make up your own. We will be looking at some of these in future posts but one good book with around 15 of these ratings systems is Paul Steele’s, Profitable Football Betting. There is also Bill Hunter’s, Football Fortunes, that describes one particular system called “Rateform“, which incorporates ways in which you can adjust ratings to take into account the relative strength of teams that you have played against.

That is it for now but my blog post on Friday will be a review on the stablemate of Betting on Soccer Strategy, known as Soccer Magic Matrix. There will be another post on Making a Living from Football Betting next Wednesday.