Probability and how to price a market
When assessing a market, we are determining the probability of each outcome. We do this by using our own intimate knowledge of the sports we tip, as well as advanced statistical analysis which combined gives us a framework to price each market. Once we have determined our true prices and lines for each market, we are able to compare them to the bookmakers’ offerings and identify where the value is in a particular match or market.
There are many variables to factor into pricing each market, particularly in sporting events. Individual matchups within team sports can play a huge part in determining outcomes, as can weather conditions, coaching or tactical decisions, playing style, team selections and many, many more small components, that add up to ultimately shaping a market accurately.
Each individual game has its own unique set of circumstances. Never again will a game be played under the exact same conditions or with precisely identical factors, therefore no unique situation (or match) can be treated the same. This means that ultimately, every match must be effectively evaluated on an individual case by case basis to be accurate.
So where does probability come into it? In most cases, a bet either wins or loses. Meaning you are paid 100% or 0%. But a result does not dictate whether your bet was a correct bet, or an incorrect bet long term as the payout suggests. Let’s look at a couple of examples that can be affected by what we would label ‘variance’.
We have played the ‘unders’ on a particular NBA player to score 15.5 points in a game. He averaged 16 points on the season, however we have identified that he matches up poorly against his opponent and is likely to see less court time as a result. In this game, he plays just 24 minutes instead of his average of 35, however, he makes 8 of his 10 shots in that time & covers his point total. This is a losing bet, but a winning play long term. The player had reduced time on court, shot less shots, however on the day had extremely high field goal percentage (80% instead of his average of 45%). If we were to find the same set of circumstances 100 times, we would win this bet often enough that it would show a strong positive return over time.
In an AFL match, we have played an “over” point total line of 122.5, expecting an open, free flowing style of football to be played, with forward lines capable of punishing some weaker defences. The match plays out perfectly, however of 42 total scoring shots, only 14 are goals, with 28 being behinds, for a total of 112. Applying the 2019 AFL seasons average goal kicking accuracy of 46% it would be reasonable to expect 19 goals, 23 behinds from the same amount of shots, a total of 137. In this case, the way the match was played out we would expect to see the total go over more often than not – again the correct play long term, but not a collect on the day.
Pricing a market involves converting the probability of an outcome to correct odds. For example, if something is 50% to happen & the price was $2 this would be correct odds, and there would be no value. As we see in most head to head markets, bookies offer around $1.90 on both sides. For this to be a profitable play for us at those odds, we need to win around 53% of the time. Of course, each play is unique and we have some longer plays which require a lower success rate to maintain profitability. Some key misconceptions are that every tip “should” win, or that you need to bet on long odds plays to be profitable – neither is true. Profitability is derived from identifying overpriced outcomes in the marketplace, this is the only way true profitability can be sustained.
This is a long game. Our unique skillset, work ethic and expertise puts you in a position to succeed. One single bet, day, week or month will never make or break us. Follow our picks and staking system to learn for yourself how we beat the bookies long term – by tilting the odds back in our members favour.