Expected Value (EV) is the most simple of all betting equations:
Expected Value is the predicted value of a variable, calculated as the sum of all possible values each multiplied by the probability of its occurrence
Simply, Expected Value is the average result you should expect to receive from the given bet or equation
Here is the formula in its raw form:
(Amount won per bet * probability of winning) – (Amount lost per bet * probability of losing) =
As is obligatory in any mathematics explanation, let’s explain with a coin toss.
A coin toss is 50/50 right? In a fair world, the odds would be set at $2.0 and the expected value for any flip would be 0, here is the equation assuming a $10 bet size (the 50% is always represented as a decimal, here as .50):
(10 * .50) – (10 * .50) = 0
Now, let’s assume the odds don’t reflect the 50/50 probability and the bookmaker has provided bookmakeresque odds of $1.95. Let’s see how that fits into our equation assuming the same bet size of $10:
(9.50 * .50) – (10 * .50) = – 0.25
Say goodbye to an average of 25 cents every time you place this bet.
It’s a simple calculation but we’ve made it a little bit easier with this calculator.
Just input the odds you have found, the probability you have calculated, and the bet size committed and the calculator will tell you the exact expected value: