Understanding Bookmaker Odds & Finding Value Bets

Many of us like to have a bet on sports whether it be on the weekend’s football or the day’s racing with some studying form and others following footballtips from professional analysts like here at The Footy Tipster.

The main aim for all of us is to win our bets thus returning a profit and ultimately, beating the bookies. However, when determining whether or not we are actually beating the bookies, we have to first understand odds, how they are set and if there is any value in them.

How Do Bookmakers Set Their Odds?

The odds of any event are determined by calculating the probability of all possible outcomes.

For example, if you were to toss a coin, there would be two possible outcomes, both of which have the same probability of occurring. Heads or Tails. In terms of odds, this would give each possible outcome odds of Evens (2.0).

When determining the probability of an outcome in sports, things get a little more complicated as there are so many different factors to take into consideration.

For example, in a football match, factors such as the following can all impact the outcome.

  • Lineups
  • Past head-to-head results
  • Home advantage
  • Injuries/Missing players
  • Formations
  • New manager
  • Current form

Based on all of the above, along with several other factors, the bookmakers and their traders will determine the probability for each possible outcome. 

In the ‘Match Result’ market, there are three possible outcomes. Home Win, Draw and Away Win.

Let’s say that a bookmaker determines the following probabilities:

  • Home Win: 50%
  • Draw: 33.33%
  • Away Win: 16.67%

Adding all of the percentages above gives a total of 100%.

This would be equivalent to the following odds:

  • Home Win: Evens (2.0)
  • Draw: 2/1 (3.0)
  • Away Win: 5/1 (6.0)

These would be the odds that the bookie offers to customers if they had a ‘Fair Book’. However, the bookmaker will reduce the odds slightly so that they are guaranteed to make a profit on the market so long as they balance their books correctly.

Instead of offering the above, the bookie may offer:

  • Home Win: 1.95 
  • Draw: 2.90
  • Away Win: 5.50

The implied probability of a home win has increased by 1.3%, a draw 1.2% and an away win 1.5%, giving a total of 104% (51.3% + 34.5% + 18.2%).

As a set of possible outcomes can’t exceed 100% probability, this means that the additional 4% is the bookies edge on the market.

If the bookmaker was to take bets of equal amounts of money on all possible outcomes, they would be guaranteed a profit of 4%, or £0.04 for every £1 that is staked regardless of the outcome. That may not seem like a lot but when millions of pounds are being wagered on an event and there are hundreds of events taking place each day, it can result in huge profits for the bookie.

Are You Really Beating The Bookies?

Even if you return a profit, it’s unlikely that you’re hurting the bookies as they should, if they have balanced their books properly, make a profit regardless of the result. 

However, that shouldn’t matter too much to you if you are making money. What should matter though is if you are placing bets that have value.

What Are Value Bets?

Value bets are bets that are priced in favour of the punter.

For example, the true odds on a toss of a coin landing on heads is Evens (2.0).

A bookmaker may offer odds of 19/20 (1.95) on heads in order to make a profit.

However, the bookies don’t always get it right and occasionally offer odds that are priced too big.

Instead of offering 1.95 on heads, or even the true odds of 2.0, they may offer 2.05 or 2.10.

In these circumstances, these are Value Bets.

Bets that are priced above what the probability of them occurring are.

Placing value bets is the only way to make a profit in the long term if you are betting with a fixed-priced bookmaker.

Of course, you can place a bet at short odds with a bookmaker, win and make a profit, but in the long term, as the bookie has the edge, you will ultimately be down.

If you tossed a coin three times, it wouldn’t be too surprising to see it land heads up 100% of the time. However, toss it 1 million times and you’ll find that it will land head-up very close of 50% of the time based on the law of averages. This is why it is important for you to find value in your bets so that you stand the best chance of making a profit in the long run.

How To Find Value Bets

There’s no one way to find value bets but there are opportunities every day.

The first is to look at the odds being offered on betting exchanges such as Betfair Exchange, Smarkets and Matchbook. As these prices are set by the market and there is no bookmaker edge, they can often be considered as being close to the true odds. If a bookmaker is offering prices higher than available on the exchange, it could be a value bet. 

Bookmakers adjust their odds frequently due to several factors. However, some are quicker to do so than others. The faster ones are often referred to as ‘sharp bookies’. Some punters compare the odds of sharp bookies to soft bookies, who are slower to update their prices, and place their bet with the soft bookmaker should the price be higher in order to gain more value.

Lastly, you should use your own expertise in the sport & event in order to determine whether or not a bet has value. Do you know something that the bookies may have missed? Maybe a key player has recently been injured and is unlikely to play or you’re confident of a new arrival in the team that has yet to be publicly announced.


Hopefully this guide will have helped you understand how bookmakers set their prices and why it is important to look for value in your bets before placing them as part of a long term profitable betting strategy.

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