Opinion: Profiting From Lower League Football Betting
Implied Probability and how you can use it to profit
Is it Possible to Master the English Football League & Gain a Side Income by Using Implied Probability?
I would like to preface this article by saying that I personally NEVER bet on the English Championship, League 1, and League 2. Initially, I thought it was next to impossible to win in these leagues, and I believed that the statistics backed me up. In the 2017/18 season, for example, only 12/72 EFL sides won 50% of their games or more. In my eyes, it is a lottery, and you’ve as much chance of winning by randomly selecting names as you do through pursuing detailed research.
I’ve often heard punters say things like: “Why are Coventry 2/1 to beat Crewe away?” The answer is: Because it is League 1!!! However, I have come to realise that if you decide to specialise in the EFL, it IS possible to make a profit, but like any form of betting, you required one of two things. Either a statistical edge based on extensive data analysis, or a personal edge such as intimate knowledge about a league and/or team that the general markets and the bookmakers are unaware of.
“Never Rely on a Single Source of Income”
These are the words of Warren Buffett, arguably the greatest investing mind of our time. Although he has never earned money backing Derby to win away at Millwall and prefers the Standard & Poor 500 index fund, he is 100% right about generating further income streams.
The banks are not helping us these days; the average interest rate on a savings account was 1% in 2017 and is not going to get any better! Back in 1990, it was 13.56%! Meanwhile, the UK inflation rate rose to 2.5% in August 2018 which means we are losing money by keeping it in a savings accounts.
It is often said that betting on sports such as football is not a reliable source of income. I beg to differ. Despite my opposition to the industry in general (it should not be allowed to advertise in my opinion), it IS possible to generate a decent side income akin to what you would expect from the stock market.
For example, Buffett made a highly publicized bet with an asset manager at Protégé Partners. The bet was $1 million, and Buffett said his S&P index fund would outperform a collection of hedge funds over ten years. Overall, he won easily with an ROI of 7.7% annually compared to a dismal 2.2% from the hedge funds.
Let’s be clear here; we are talking about hedge funds chosen by an industry expert. Yet he only managed 2.2%. What would the Average Joe achieve? Likewise, Buffett is a legend in the investment field and a billionaire many times over. Even his excellent picks yielded ‘only’ 7.1%, albeit compounded annually which led to an extremely healthy nest egg.
What kind of returns is possible from betting on football? The Football Advisor Portfolio of Football and Horse Racing bets has yielded an ROI of 4.9% for over a year now. It kicks hedge fund guy’s ass and isn’t a million miles behind the extraordinary Warren Buffett.
Incidentally, your bank would have grown by almost 60% in that time so an investment of £1,000 would be worth around £1,600 or a £600 return in 12 months. Obviously, this all depends on how much you bet per unit. Remind me again, what’s your bank’s savings account rate?
It's certainly possible to win betting on the lower football leagues and armed with the right data or personal knowledge, you can routinely find bookmaker mistakes as they spend less time on their odds compiling for these markets. This doesn't surprise me because I personally find bookie blunders in amateur football all the time (and I will write about that at a later date).
However, I can tell you about the need to understand implied probability. As well as helping you learn more about a bookmaker’s vigorish (profit per event), this knowledge also enables you to determine if and when a bookie has messed up his pricing. Remember,
The KEY tenet of successful betting in the long-term is to find value.
As bizarre as it sounds, it is less about winning or losing and more about identifying pricing mistakes. If you do this, you WILL eventually win often enough to generate profit.
Implied probability involves converting decimal odds into a percentage and considering a bookie’s edge. Now, it is possible to eliminate this edge and express the ‘real’ odds of an event occurring.
The above is a screenshot of numerous Championship games for August 18, 2018. Let’s take Millwall vs. Derby as an example. The odds are:
- Millwall – 2.4
- Draw – 3.3
- Derby – 3.3
To get the implied probability of each outcome, simply divide by 100. As a result:
- There is a 41.66% of Millwall winning.
- There is a 30.3% chance of a draw.
- There is a 30.3% chance of Derby winning.
The overall total is 102.26 which means Bet365 has a 2.26% edge on this game. To be honest, that’s quite low. I have seen many games with a 6%+ edge. In simple terms, you have to decide if Millwall’s chances of winning are higher or lower than 41.66% although, in reality, there needs to be a couple of percent of a difference to justify a bet because you must take a bookmaker’s edge into account.
So far, so good but now for the tricky part: Trying to figure out whether a team is a ‘value’ bet. It is especially difficult for Millwall vs. Derby because both sides have only played two games so far this season. Millwall has two draws so far while Derby beat Reading 2-1 away but lost 4-1 at home to Leeds.
One option is to look at last season’s results, but of course, this set of data does not account for new transfers, managers, etc. Even so, we see that Millwall won 12/23 matches at home (52.17%), but Derby only lost 5/23 (21.73%). Arguably the value bet in this instance is a draw at 3.3.
Millwall drew 7/23 home games last season (and a home draw this season) while Derby drew 10/23 away games in 2017/18. The combined total is 17/46 (36.95%). Overall, 30.43% of Millwall’s home games were drawn last season while a whopping 43.47% of Derby’s away matches ended in stalemate.
You can use the same theory for all kinds of bets including match goals, corners, yellow cards, and so on.
If we take match goals as another example in our featured game, we see that over 2.5 goals have an implied probability of 48.78% (100/2.05) while under 2.5 goals has an implied probability of 57.14%. Here, Bet365 has a ‘vig’ of 5.32% which means we must tread carefully.
By looking at last year’s statistics, under 2.5 goals seems the most attractive option. Millwall home matches averaged 2.35 goals last year, and 61% of their games had 0-2 match goals. Derby away matches averaged 2.39 goals a game although only 52% of their games had 0-2 goals. Last year’s meeting at The Den finished 0-0.
If you elect to average the two, there is a 56.5% chance of the game having 0, 1, or 2 goals. As a result, the under 2.5 odds ‘should’ be 1.77 which means there is NO value in 1.75. Likewise, there is a 43.5% chance of 3+ goals which means the odds ‘should’ be 2.3, so the 2.05 is pretty awful. Even the 2.18 on the Betfair Exchange does not represent value.
Now, whether Frank Lampard’s Derby is likely to be more entertaining than last year’s team is for you to decide. As I said earlier, it is very hard to use implied probability early in a season, but it should yield sweet fruit as the year progresses.
If Warren Buffett Bet on the English Football League
When Buffett talks about investing, people would be wise to listen. Although this advice relates to more ‘traditional’ forms of investment, it is completely relatable to football betting and especially the English Football League.
- Don’t Rely on a Single Income Source: You can enjoy higher returns on football betting than on mutual funds when you know what you’re doing.
- Diversify: Although you need to become an expert on the EFL, don’t see the match outcome as your only betting option. Bets such as match goals, team goals, and Both Teams to Score are viable alternatives.
- Risk Taking: Buffett once said: “Never test the depths of the river with both of your feet.” It is a roundabout way of saying ‘only bet what you can afford.’ Pick a sum of money you could comfortably lose, determine how many units you want to begin with, and assign a cash value to a single unit. For example, you could have a £1,000 investment with 100 x £10 units. If you don’t risk more than a unit at a time, you should have more than enough to ride out a storm.
- Use Expert Advice: Michael Gove infamously claimed that British people have had enough of ‘experts.’ Don’t listen to him! The team at Football Advisor routinely provide profitable tips for a very good reason; they know what they are doing!
- Develop Your Own Style: This goes back to what I said about choosing different bets. Over time, you’ll learn what works for you and what doesn’t. For me, backing team goals and handicaps in obscure leagues worked wonders until all the bookies restricted me. Successful punters find a trading style that suits their personality.
Failure to follow this advice means you could end up like the Monopoly guy above! The EFL is notoriously tough to predict, but you can crack the code with the aid of implied probability. It is a LOT of work however so if you don’t have this kind of time, let the Football Advisor team do it for you.
Step by step guiding to building a successful and profitable betting portfolio. Download for free here
Weekly Best Bets:
It is designed to be a really easy and enjoyable service to follow along with just a couple of emails a week and a handful of well researched and supported bets recommended to you each week. If this sounds like something you'd enjoy why not join us for the full European season for just £9.95 a month or £77 for the whole season.
Patrick graduated from the National University of Ireland, Galway with an MA in Literature and Publishing but decided he would rather have the freedom of a freelance writer than be stuck in a publishing house all day. He has enjoyed this freedom since 2009 and has written thousands of articles on a variety of topics but sports betting is his passion. While his specialty is finding mismatches in obscure football leagues, he also likes to use his research skills to provide punters with detailed winning strategies in horse racing. You can check out his personal blog on www.lynchthewriter.com or Twitter @pl1982 where he writes content to help small businesses achieve success.