Value bets provide benefit for long term players. The easiest way to explain it using heads and tails. Everybody knows that the chances are 50/50. Let’s imagine that we have a 2.1 wager on heads. Thus, we have value bet of 50%*2.1=1.05. Doing the math, our profit is 5% from each our wager. For instance, having 1 000 bets, the number of heads and tails would be nearly equal. It means that we win approximately 500*2.1=1050. Revenue is 5%.
Let’s consider some sports examples. Assuming that Spartak vs. Dynamo was valued by 35% and the odds are @3.0, we have 35%*3.0=1.05. That means that the very bet is valued. As long as the chances are true, in 4 of 10 cases we would win with @3.0. Accordingly, having 1 000 wagers we win 350 times with @3.0 – 35*3.0=1050. Revenue is 5%.
Butt still there is bad news. Remember that any bookmaker will not offer value bet the same as it is in the example with the coin. Otherwise, they would close down having achieved nothing. That’s why they prefer to give odds that are less than valued.
Picture the situation when a bookie offers @1.80 for heads and for tails. In case of a win, total would amount to $ 200 (if each bet worth $100). We assume the tails win. The bookie pays off the odds of @1.90 (1.80*$100) in fact, paying off $180. But the total amount was $200, don’t you remember?
Sure, it was. They've made $20 on this bet. Actually, that is commonly known as commission or service charge/fee. As the matter of fact, this is the way in which bookmakers make their money.
Value bets are pretty interesting for those who plan to profit on beting sports. It's possible to get it stable if you know how to conduct financial management.
There are many ways of frequency definition. The easiest one is your reasoning from the knowledge of sports. But it has its weaknesses. If you overestimate the probability of the given outcome, your bet results in a loss. So, as you may see, it is for professionals only, for those who possess much more information than a bookmaker.
Also, here is an all-round method to use arbs. The arb ALWAYS has overrated odds. This rule is very popular among experienced players who know how to detect value bets.