Expected value is the foundation concept underneath every serious sports betting strategy. Once you can calculate EV accurately for any bet in front of you, almost everything else — value betting, arbitrage, Kelly sizing, closing line value — is either directly derived from EV or structurally related to it.
This guide walks through the formula, three worked examples using real AU bookmaker prices, how to estimate the true probability (the hardest input), and how to apply EV to actual betting decisions.
The expected value formula
Two equivalent forms:
Dollar form:
EV = (probability of winning × payout if win) − (probability of losing × stake if lose)
Percentage form:
EV% = (true probability × decimal odds − 1) × 100
Both give you the same answer scaled differently. The percentage form is what you'll see most often in AU betting tools because it's independent of stake size and easy to compare across bets.
How implied probability works
Before calculating EV you need implied probability. Every decimal price has one. Implied probability = 1 divided by decimal odds.
- $2.00 odds → 1/2.00 = 50% implied probability
- $1.50 odds → 1/1.50 = 66.7% implied probability
- $3.00 odds → 1/3.00 = 33.3% implied probability
- $4.50 odds → 1/4.50 = 22.2% implied probability
Implied probability is what the bookmaker's price implies about the likelihood of the outcome. If your estimate of the true probability is higher than the bookmaker's implied probability, the bet is +EV.
Worked example 1: a positive EV bet
An AFL H2H market has Collingwood priced at $2.10 to win at Bet365. You believe, based on your analysis of form, injuries, and market consensus, that the true probability of Collingwood winning is 52%.
Bookmaker implied probability: 1 / 2.10 = 47.6%
Your true probability estimate: 52%
Expected value percentage: (0.52 × 2.10 − 1) × 100 = +9.2%
This is a +EV bet. Over many placements at these parameters, you'd expect to return roughly 9.2 cents for every dollar staked. On a $100 bet, expected profit is $9.20. The actual result on this specific bet will be either +$110 profit (if Collingwood wins, returning $210 on $100 stake) or −$100 (if they lose). Expected value is the average, not the individual result.
Worked example 2: a negative EV bet
An NRL H2H market has the Broncos priced at $1.40 to win at Sportsbet. You believe the true probability of the Broncos winning is 68%.
Bookmaker implied probability: 1 / 1.40 = 71.4%
Your true probability estimate: 68%
Expected value percentage: (0.68 × 1.40 − 1) × 100 = −4.8%
This is a −EV bet. Even though the Broncos are the favourite and you think they're likely to win, the bookmaker's price has them shorter than your estimate justifies. Over the long run, placing bets at these parameters returns only about 95.2 cents for every dollar staked. You would lose money consistently.
This is the most common shape of losing bets at AU bookmakers. The bet looks “safe” because it's on a favourite, but the price has been shortened below fair value by public money (see the overrated teams piecefor why). The direction of your pick isn't the question. The price is the question.
Worked example 3: a close-to-fair bet
An NBA H2H market has the Nets priced at $1.95 at Ladbrokes. You believe the true probability of the Nets winning is 52%.
Bookmaker implied probability: 1 / 1.95 = 51.3%
Your true probability estimate: 52%
Expected value percentage: (0.52 × 1.95 − 1) × 100 = +1.4%
Marginally +EV. In practice this is a borderline bet — the edge is small enough that estimation error in your true probability could push the bet to 0% or negative EV. Most serious advantage bettors set a minimum EV threshold (typically +2% or +3%) to account for estimation uncertainty. The Krok Odds +EV Finder uses a default threshold of +2% and adjusts per sport based on market efficiency.
The hard part: estimating true probability
The EV formula is trivial arithmetic. The difficulty is supplying the correct true probability. Your EV calculation is only as good as your probability estimate.
Three common approaches, ranked by reliability for AU bettors:
1. Market consensus across bookmakers (recommended)
Take the best-available price for each outcome across every AU bookmaker. Convert each to implied probability. Sum them — the result will be above 100% because each includes bookmaker margin. Divide each implied probability by the sum to produce a normalised probability that adds to 100%. The resulting probabilities are the market consensus, and they're the best single estimate of true probability available to retail bettors.
Then compare your bookmaker's offered price to this consensus. Any price with better odds than the consensus suggests is +EV against the market. The Krok Odds +EV Finder does this automatically across 100+ bookmakers.
2. Your own model
Build a statistical model that predicts outcomes from historical data. Requires serious technical skill and substantial backtesting to be useful. Most homegrown models don't beat market consensus, because the market has already absorbed almost all the information you could include. The exception is models with a specific narrow edge — for example, AFL disposal prop models that use team-level possession data more accurately than AU bookmakers do.
3. Pundit opinion or gut feel (not recommended)
Using your own qualitative assessment of probability produces EV calculations with huge estimation error. The resulting “+EV bets” are usually not actually +EV. This is how most recreational bettors lose money without realising it — they believe they're finding value when they're systematically over-estimating the probability of outcomes they like.
EV over sample sizes: what to expect
Individual bets have high variance even when EV is clearly positive. A 5% EV bet on $2.00 odds (55% true probability) over small samples can show:
- 10 bets: any result from complete loss to 100% returns is plausible.
- 100 bets: win rate typically lands between 45% and 65%. The 5% EV might produce a realised return anywhere from −10% to +20%.
- 500 bets: realised return generally lands within ±5% of the 5% expected value.
- 1,000 bets: realised return usually lands within ±3% of expected value — the variance has substantially narrowed.
This is why professional bettors track closing line value rather than win rate: CLV stabilises at much smaller samples (50-100 bets) than realised profit does.
Using EV to decide which bets to place
A practical workflow for EV-driven betting:
- Calculate market consensus probabilities for every outcome you're considering. A real-time scanner is the practical way to do this at scale.
- Find the best-available price at any AU bookmaker for each outcome.
- Calculate EV% using market consensus as your true probability.
- Apply an EV threshold — place only bets at +2% EV or better (strict enough to survive estimation error).
- Size using Kelly (quarter Kelly is a reasonable default — see the bankroll guide).
- Track closing line value on every placed bet to verify the process is actually working.
Related calculations
EV is the core, but several related calculations matter:
Kelly sizing converts your EV% and odds into a recommended stake size. Covered in detail in the Kelly calculator article.
Closing line value measures whether the price you got beat the closing price, which is the most reliable proof that your EV estimates are calibrated. Explained in the CLV guide.
Arbitrage / surebet calculation checks whether combined best prices produce a guaranteed profit. See the surebet beginner's guide.
Frequently asked questions
What's a good EV threshold for sports betting?
Most advantage bettors use +2% to +3% as a practical minimum, because estimation error in the true probability can shift apparent EV by several percentage points in either direction. Bets at +5% EV or higher are genuinely sharp placements.
How does EV relate to CLV?
EV is your prediction at the time of placing the bet, based on your true probability estimate. CLV is the verification after the fact, comparing your price to the closing price (which is the market's best final estimate). If your EV estimates are accurate, your average CLV should roughly match your average claimed EV over a large sample.
Can you calculate EV for multi-leg bets?
Yes, by multiplying the true probabilities of independent legs and comparing to the multi-leg odds. In practice multi-leg bets are almost always −EV at AU bookmakers because the vig compounds across legs. See the multis piecefor detail.
Is there an EV calculator for AU bookmakers?
The Krok Odds +EV Finder calculates EV% in real time for every bet across 100+ bookmakers, using market consensus as the true-probability estimate and updating as prices move.
Daniel writes about the maths underneath advantage betting — expected value, Kelly sizing, closing line value, bankroll theory. Translates the theoretical side into practical decisions AU punters can actually apply.