Five Essential Formulas You Need to Understand to Make Money Sports Betting

Our house sports betting account is up $91,000 this year, and it’s all because we know how to apply these principles.

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Are you eager to turn your sports knowledge into profitable bets? Understanding the mathematics behind sports betting is crucial. In this guide, we’ll break down five essential formulas that can elevate your betting game and help you make informed decisions.

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Formula 1: Fair Odds (The “No Vig” Line)

Understanding the Vig

Sportsbooks act as market makers, and they make money by charging a spread called the vig or juice. Here’s how it works:

1. Determining Fair Odds: Sportsbooks use sophisticated models to calculate the “fair” price for a bet without the vig. For example, they might assess the Dodgers at -135 and the Yankees at +135.
2. Adding the Vig: They then adjust these odds to include the vig, offering the Dodgers at -145 and the Yankees at +125. Essentially, they provide you with worse odds than the fair value to ensure their profit.

Calculating Fair Odds

To find the true value, you need to remove the vig. This is where a fair odds calculator comes in handy. For instance, if Pinnacle (one of the sharpest sportsbooks) lists the Dodgers at -140 and the Yankees at +129, the fair odds would be approximately -134 for the Dodgers and +134 for the Yankees after removing the vig.

• Fair Odds Calculator: Calculate No Vig Odds

Why It Matters

If you can find a bet where the odds are better than the fair odds (e.g., betting on the Yankees at +145 when the fair odds are +134), you’re placing a bet with a positive expected value (+EV). This means, over time, you’re more likely to profit.

Key Takeaway: Profitable sports betting hinges on finding bets above fair value. Always aim to bet at or better than the fair odds.

Video Tutorial: Understanding Fair Odds

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Formula 2: Expected Value (EV)

The Essence of Probability

Sports betting is a game of probabilities. Understanding expected value helps you determine whether a bet is worth placing.

Calculating Expected Value

Suppose you believe a bet has a 50% chance of winning, and you’re getting +110 odds. If you wager $100:

• Expected Value = (Probability of Winning × Profit) – (Probability of Losing × Loss)
• EV = (50% × $110) – (50% × $100) = $55 – $50 = $5

This means, on average, you can expect to make $5 per $100 bet over the long term.

Why It Matters

Not every bet will win, but consistently placing bets with a positive expected value will yield profits over time. It’s about making smart bets that statistically favor you.

Key Takeaway: Always aim for wagers with a positive expected value to maximize long-term profitability.

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Formula 3: Arbitrage and Hedge Amounts

Hedging Bets for Profit

Sometimes, you might want to hedge a bet to secure a profit or minimize a loss. Arbitrage betting involves placing bets on all possible outcomes across different sportsbooks to guarantee a profit due to discrepancies in odds.

Real-Life Example

• Fliff: Bucky Irving not to score at -105
• DraftKings: Bucky Irving to score at +110

These odds are so out of sync that you can bet on both outcomes and lock in a risk-free profit of $11. The key is knowing how much to wager on each bet.

Calculating Hedge Amounts

Use an arbitrage calculator to determine the exact amounts to bet on each outcome:

• Arbitrage Calculator: Find Arbitrage Opportunities

Why It Matters

Arbitrage opportunities are rare but can provide guaranteed profits when they arise. Tools like OddsJam scan millions of odds to identify these opportunities.

Key Takeaway: Use arbitrage betting to capitalize on discrepancies between sportsbooks for risk-free profits.

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Formula 4: Understanding Parlays

The Appeal and Risk of Parlays

Parlays combine multiple bets into one, offering higher payouts but also increasing the risk. Many new “fantasy books,” such as Betr Picks, focus on parlay-only betting.

Why Parlays Are Popular

• Higher Potential Payouts: The combined odds of multiple bets can lead to significant winnings.
• Increased Excitement: Multiple bets enhance the thrill of betting.

The Downside

• Lower Probability of Winning: All selections must win for the parlay to pay out.
• Negative Expected Value: Unless you’re getting bonuses or incentives, parlays typically aren’t +EV.

Strategic Parlay Betting

• Look for Promotions: Some sportsbooks offer bonuses that can make parlays +EV.
• Select +EV Individual Bets: Combining bets that individually have a positive expected value can improve your chances.

Key Takeaway: Parlays are enjoyable but usually not profitable in the long run unless enhanced by bonuses or strategic betting.

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Formula 5: Odds Converter and Implied Probability

Decoding Different Odds Formats

Some sportsbooks present odds in decimal or payout formats rather than the traditional American odds. Understanding how to convert these odds is essential.

Example Conversion

• ParlayPlay offers Nikita’s over 2.5 shots on goal at a 1.66x payout.
• This means betting $100 to win $166 ($66 profit).
• Conversion to American Odds: A 1.66x payout equates to -151 in American odds.

Why It Matters

Knowing how to convert odds allows you to:

• Compare Odds Across Books: Ensure you’re getting the best value.
• Assess Implied Probabilities: Determine the sportsbook’s implied chance of an event occurring.

Calculating Implied Probability

• Formula: Implied Probability = Risk / (Risk + Reward)
• For odds of -151: Implied Probability ≈ 60.16%

Key Takeaway: Mastering odds conversion and implied probability helps you make informed bets and identify value across different platforms.

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Bonus: Additional Important Formulas

1. The Kelly Criterion for Bankroll Management

Optimal Betting Amounts

The Kelly Criterion helps you determine the optimal percentage of your bankroll to wager on a bet to maximize growth while minimizing risk.

Kelly Criterion Formula

• Fraction to Bet = (Edge) / (Odds)
• Edge: Your advantage over the sportsbook (expected return – 1)
• Odds: Decimal odds of the bet

Example

• Edge: If the fair odds are +100 (2.0 decimal) and you’re getting +110 (2.1 decimal), your edge is (2.1 / 2.0) – 1 = 0.05 or 5%.
• Odds: 2.1
• Fraction to Bet: 0.05 / (2.1 – 1) ≈ 4.76%

This means you should bet approximately 4.76% of your bankroll.

Why It Matters

Using the Kelly Criterion prevents you from over-betting and risking significant losses, ensuring sustainable growth.

Key Takeaway: Apply the Kelly Criterion to manage your bankroll effectively and optimize bet sizes.

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2. Calculating the Vig Amount

Understanding the Sportsbook’s Cut

Knowing how much vig a sportsbook charges helps you evaluate the fairness of the odds offered.

Vig Calculation Formula

1. Calculate Implied Probabilities for all possible outcomes.
2. Sum the Probabilities and subtract 100%.

Example

• Odds: -110 on both sides
• Implied Probability: For -110, it’s 110 / (110 + 100) × 100% ≈ 52.38%
• Total Probability: 52.38% + 52.38% = 104.76%
• Vig Amount: 104.76% – 100% = 4.76%

Why It Matters

Understanding the vig helps you identify which sportsbooks offer better value and how much extra you’re paying.

Key Takeaway: Calculate the vig to assess the true cost of your bets and choose sportsbooks with lower vig.

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Final Thoughts

Mastering these formulas equips you with the tools to make smarter bets and improve your chances of profiting from sports betting. Remember, successful betting isn’t just about luck; it’s about making informed, calculated decisions.

Feel free to reach out with any questions. We live for helping sports bettors beat the sportsbooks and love creating sharp, data-driven content to support your betting journey.

Happy betting!