How to Calculate Expected Value in Betting

Expected Value (EV) helps you figure out if a bet is likely to be profitable over time. It’s a simple formula that compares your chances of winning, the potential payout, and your stake. Here’s how it works:

EV Formula:EV = (Probability of Win × Payout) – (Probability of Loss × Stake)A positive EV means potential profit; a negative EV means likely loss.
Steps to Calculate EV:
1. Estimate Win/Loss Chances: Use betting odds or your own research to find probabilities.
2. Calculate Payout: Add your stake to the potential profit.
3. Apply the Formula: Plug in the values.
4. Analyze the Result: Positive EV? It may be a good bet.
Example:Bet $100 on a team with a 60% win probability and +120 odds:EV = (0.60 × $220) – (0.40 × $100) = $92This bet has a positive EV of $92, suggesting profitability over time.

To improve your results, use no-vig (no house edge) platforms like BettorEdge. These reduce the breakeven win rate from 52.4% to 50%, increasing your chances of finding profitable bets. Always track your data and avoid common errors like overconfidence or misjudging probabilities.

The Expected Value Formula

Basic Formula

Expected value (EV) helps calculate the average result of a wager over time:

EV = (Probability of Win × Payout) – (Probability of Loss × Amount Bet)

A positive EV suggests potential long-term profit, while a negative EV signals likely losses.

Formula Components

Pwin: The decimal probability of winning, ranging from 0 to 1. The probability of losing is calculated as .
Payout: The total amount credited if you win, including both your stake and the profit.
Stake: The amount you wager.

We'll now break down how to use this formula step by step.

How To Calculate Expected Value - +EV Sports Modelling

4 Steps to Calculate Expected Value

Here’s how you can calculate Expected Value (EV) in four straightforward steps:

1. Estimate Win/Loss Chances

Start by figuring out the probabilities of winning or losing. You can either rely on the implied probability from the betting odds or do your own research. Key factors to consider include:

Recent team performance and stats
Head-to-head matchup history
Player injuries
Home and away performance trends

Your own analysis might reveal a probability different from the sportsbook’s, which can help you spot opportunities.

2. Calculate Potential Returns

Determine two key numbers: the total payout (stake + profit) if you win, and the potential loss (your stake) if you lose.

3. Use the EV Formula

Plug your values into the EV formula: EV = (Pwin × Payout) – (Ploss × Stake). A positive EV suggests a bet with potential for long-term profitability.

4. Work Through an Example

Let’s say you think a team has a 60% chance of winning, and the odds are +120. You decide to bet $100:

Win probability: 0.60
Loss probability: 0.40
Potential payout: $220 ($100 stake + $120 profit)
Potential loss: $100

Now, calculate:

EV = (0.60 × $220) – (0.40 × $100)EV = $132 – $40EV = +$92

This positive EV of $92 means that, over time, this bet is likely to be profitable.

Up next, we’ll explore how EV works in peer-to-peer, no-vig betting.

Expected Value in Peer-to-Peer Betting

Now that you know the EV formula, let’s see how it works in peer-to-peer betting. This type of betting eliminates the house edge, allowing you to access full odds without any fees.

Why No-Vig Betting Matters

Without the house edge, finding positive expected value (+EV) becomes easier. In traditional sportsbooks, you need a win rate of over 52.4% just to break even. On no-vig platforms, that threshold drops to over 50%. This change means about 40% of users can potentially profit on peer-to-peer exchanges, compared to only around 2% at standard sportsbooks.

Leveraging Bet Tracking Tools

Tools like BettorEdge provide analytics such as ROI tracking, win-rate breakdowns, and performance trends. These features help you base your EV calculations on actual data.

Comparing EV: No-Vig vs. Traditional Odds

Here’s an example showing how EV improves with no-vig odds. If you have a 53% win probability, your EV increases from +$54.18 at -110 odds to +$59 at +100 odds - an extra $4.82 for every $100 bet.

Traditional Sportsbook (-110 odds)EV = (0.53 × $190.91) − (0.47 × $100) = $101.18 − $47 = +$54.18

No-Vig Platform (+100 odds)EV = (0.53 × $200) − (0.47 × $100) = $106 − $47 = +$59

Tips and Mistakes to Avoid

Before making your next bet, use these tips to refine your calculations and steer clear of common errors that could skew your EV estimates.

Calculation Tips

Leverage BettorEdge's analytics dashboard to track win rates and trends across various sports. This will give you solid, data-backed probability estimates.
Organize your bets by sport, type, or league. For example, if moneyline bets have a 55% win rate compared to 48% for spreads, adjust your EV calculations to reflect this difference.

Common Pitfalls

Overconfidence bias: Always rely on your tracked data for win probabilities, not your instincts.
Mispricing bets: If your lines don't align or seem off, revisit and refine your win-probability estimates.
Sample size issues: Avoid trusting win-rate data until you have at least 50 wagers in a specific category.

Comparing Opportunities

Use a table like this to evaluate bets side by side:

Bet Type	Your Probability	Market Odds	Potential Return	EV per $100
NFL ML Favorite	65%	-150	$166.67	+$8.33
NBA Spread	55%	+100	$200.00	+$10.00
MLB Underdog	40%	+200	$300.00	+$20.00

You can also join BettorEdge competitions to see public win rates, but remember to base your decisions on your own tracked results for the most reliable outcomes.

Summary

Grasping the concept of expected value (EV) helps you identify favorable bets and steer clear of hidden losses. By using the EV formula and leveraging peer-to-peer, no-vig odds, you can enhance your EV and increase your long-term returns. BettorEdge’s analytics dashboard simplifies tracking for NFL, NBA, and MLB games, helping you fine-tune your win-probability estimates.

Success with EV-based betting relies on precise probability assessments, regular performance tracking, and disciplined bankroll management. With these strategies and tools, you’ll be better equipped to apply EV calculations to your upcoming bets.