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WHAT IS IMPLIED PROBABILITY?
This is one of the most important things to understand and harness, if you are going to beat the bookies.
The implied probability helps you to understand how likely the bookmarker thinks a particular outcome is to happen.
Before we can delve into implied probability, we will quickly cover odds display.
Bookies generally display odds in three different ways, which can be confusing.
DECIMAL 1.5 Bet £100 to return £150, with £50 profit
MONEY LINE +200 Bet £200 to profit £100
FRACTION 0.5/1 Bet £100 to profit £50
We use decimal odds, because it is the SIMPLEST form of odds to understand and work with.
You can change the odds display in the setting of any online betting account. I recommend that you switch yours to decimal now.
CALCULATING IMPLIED PROBABILITY
Using the decimal odds, we can calculate the implied probability.
IP = 1/1.5 x 100 = 66.7%
This means that with decimal odds of 1.5, the bookies are 66.7% confident that this outcome will happen.
REAL LIFE EXAMPLE
Blachowicz Vs Rakic
Blachowicz odds are 2.55 1/ 2.55 x 100 = 39.2%
Rakic odds are 1.5 1/1.5 x 100 = 66.7%
The total percentage confidence allocated to each fighter by the bookies will always exceed 100%, it’s usually somewhere around 105%. This extra 5% is the advantage the bookies have over their customers.
39.2% + 66.7% = 105.9%
TRUE WIN RATE
The true win rate is your estimation of how likely a particular outcome is to happen. To calculate your true win rate, you need to research the fighters and analyse their statistics. At MMA Betting Edge, we have a dedicated team of analysts who do all of this for you. You can also get involved with the research via weekly live streams on our website.
When there is a significant difference between your ‘TRUE WIN RATE’ and the ‘IMPLIED PROBAILITY’, this is your opportunity to capitalise.
If you were to carry out your research and decide that your true win rate for Rakic of 75%, then you have found value in the odds offered at 1.55 (66.7%). The difference between your true win rate and the implied probability is 8.3%, which is significant enough to consider placing a bet on Rakic.
Another way to help you work out your true win rate is to ask yourself, if Rakic fought Blachowics 100 times, how many time do you think Rakic would win? If you answer is 75, then your true win rate is 75%.
It’s key to remember, in order to profit using this type of analysis, you need to CONSISTENTLY hit bets that have been undervalued by the bookmakers.
Here is a table displaying your return on investment (ROI), for difference levels of accuracy when betting at odds of 1.5