Value bet
A value bet is a situation where the true probability of an outcome is higher than the one implied by the offered odds. In other words, the market underrates the event. It's the foundation of a rational approach: not to « win often », but to bet when the odds are too generous.
You compare the estimated probability (from a model or analysis) to the odds' implied probability (1 ÷ odds). If your estimate is higher, there's value. Over many bets, only playing value bets is the only way to hold a positive expectation.
Careful: « value » doesn't mean « winner ». A value bet can lose; the edge only shows up over volume.
Example
You estimate an outcome at 50% (fair odds 2.00) but the bookmaker offers 2.30: there's value.
See also
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