Sports Betting 101: Guide to expected value and variance

Sports Betting 101: Guide to expected value and variance

Did you know that bookmakers’ odds don’t always reflect the actual probability of the game’s outcome? I know, right?! What’s up with that? How are you supposed to know how to place your bets?

Okay, don’t stress, there’s a lot more to it. If you’ve been following our Sports Betting 101 series, you should hopefully know by now that sports betting and odds calculation are pretty complex, and that it’s about more than just who’s going to win or lose. Placing a bet on any sporting event is about picking the best possible financial outcome for yourself, whether that means betting on a win, loss, draw, placement, points spread or even points total. It can even involve courtsiding – if you’re brave enough and have nerves of steel! (Seriously, read those guides first – this one’s higher grade.)

A casino is a casino is a casino, right? How different can one casino be from another? All they do is exchange money for chips, offer games, and then exchange chips for money.

Well, no. No story goes, “Once upon a time, everything was simple, everything was the same, and everyone was happy. The end.”

Every casino – both brick and mortar and online – is unique. Yes, there are similarities, both legislative and game based, but there’s no way to summarise all casinos with just a few simple sentences.

Luckily for you, we have taken the time and effort to really get into the foundations of online gambling: what makes it tick, how it works, what players can expect, and so much more. Here, we offer you all the in-depth guides to online casinos and gambling you’ll need. And we take that promise seriously, which is why we are constantly working to add more guides that cover every aspect of the online casino experience.

In this series of guides, you will find information about jackpots, variance and volatility, online casinos, casino bonuses, withdrawals and deposits, and more.

Why should you use guides?

Casino guides like these can really help enhance your online casino experience. For example, jackpot guides don’t just tell you what a jackpot is; they explain the various types of jackpot, how they work, how to play to win, where to find games with different jackpots, and even who the game developers are.

Casino bonus guides are another super useful way to figure out which online casinos will work best for you. We don’t only look at the types of bonus offered, but explain how they work, the hidden pitfalls to look out for, and ways to make the most of your wagering requirements.

You’ll find enough information here to keep you busy longer than a great game of poker, so dig in, and come out the other side a little more knowledgeable. And if there’s anything you’d like to learn more about that you don’t find here on CasinoPlay, let us know. Happy reading!

Bookmakers are experts in both betting behaviour and maths. They’re a mystical combination of psychologists, sociologists, accountants and statisticians who calculate odds that reflect these factors. One factor that strongly influences odds is ‘public betting’. This is when gamblers strongly favour betting on a particular player or team based on their popularity, regardless of whether their skill or track record merits this devotion. This type of betting could potentially skew the payouts if bookmakers were only showing the actual probabilities of given outcomes.

To compensate, bookmakers will adjust the odds, and therefore the potential payouts, to minimise their own losses. A public team could be listed as the favourite, with lower winnings margins, even if they are not statistically likely to win. Conversely, the underdog in the odds might actually stand a good chance of winning, yet their potential win margin is higher.

A smart gambler who has spent time researching and understanding the game, statistics, track record and so forth, might easily recognise that placing a bet on the underdog would potentially yield them a significant win. This, in a nutshell, is positive expected value.

Bookmakers’ odds provide an implied probability for the outcome of any sporting event. However, your calculations may differ – this is your true implied probability. For example, if the sportsbook implied probability indicates that Team A has a 60% chance of winning, but your true implied probability shows that they have only a 45% chance of winning, this is a negative expected value.

The expected value is what you expect to gain from placing a bet, based on the bookmakers’ odds in contrast to your own knowledge.


Variance is a mathematical term that refers to the distance of the spread of numbers from their average – in other words, how big is the difference between all the individual numbers and the average? But what does this have to do with sports betting?

If you are a serious sports bettor who has spent time learning how it all works, calculating statistics and potential outcomes, choosing bets based on positive expected value and so on, you probably place bets on a regular or consistent basis. Over time, you will experience some wins and some losses; when it comes to variance, we want to pay attention to how far those wins and losses deviate from the average to figure out whether you need to adjust or stick to your betting strategies.

Information is your friend. If you want to be the kind of sports bettor who places informed, considered bets that have a higher probability of getting you a win, you need to stay informed. Learn as much as you can about sports betting, the sport you’re betting on, and the maths behind how probability and statistics work.

Manage your bankroll well. Prepare yourself for inevitable losing streaks by keeping your wager increments manageable over time, and have a winnings safeguarding plan for those desired winning streaks.

Be consistent. Unless your strategy is resulting in wild deviations from expectation, it’s normal to expect some wins and some losses, that tend to average out over time. A serious sports bettor isn’t looking to double or triple their money every time – they understand that the winnings percentages may be low, but consistency is key. If your strategy is consistently netting you 10-15% ‘profit’ over time, that’s a winning strategy.

If you haven’t checked out the other articles and guides in our Sports Betting 101 series, do it now! We have plenty of insights and information for the sports bettor who wants to know more.

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