Expected Value in Sports Betting

Expected value estimates the average theoretical return of repeating the same decision at the same price. It is only as reliable as the probability estimate used.

Formula

EV = (profit if won × estimated win probability) − (stake × estimated loss probability).

Fictional example: a $100 stake at +120 earns $120 profit if it wins. At an estimated 50% win probability, EV = ($120 × 0.50) − ($100 × 0.50) = +$10. If the probability estimate is wrong, the EV result is wrong.

Limits

A positive calculated EV does not guarantee a winning outcome or realized profit. Model probabilities require calibration, out-of-sample testing, and comparison with market prices.

Sources: Smarkets; Investopedia.