When Maximizing EV Don't Be Fooled By PV

When Maximizing EV Don’t Be Fooled By PV

Jack Andrews
Professional Gambling
October 31, 2023

A wolf in sheep's clothing


Professional gamblers live by two letters: EV. The goal of any aspiring professional is to maximize your expected value. Focusing solely on wagers which have positive expected value should produce profits that converge to meet those expectations. A disciplined bettor thinks in terms of EV and trusts the actual value isn’t far behind. However, there is another component that can potentially derail EV and AV. Beware of PV: perceived value. Perceived value is when you’re given the illusion of value and led to believe that it translates into EV or AV. 


An Example of Perceived Value

I was first introduced to the concept of PV at a recent panel discussion at G2E that I shared with Alex Kane from Sporttrade. Alex has tremendous skill in explaining complex simply, for everyone to easily comprehend. He gave great examples as to how many sportsbooks dazzle customers with instances of perceived value. However, they don’t carry expected value or actual value. In fact, in many cases, they encourage significantly negative expected value behavior.

Here are common examples of PV similar to what Alex cited:

Caesars Promo Odds BoostBetMGM Promo Odds Boost


Two odds boosts for the same game from two different books. They both involve events that are almost completely uncorrelated. There is some minor correlation because Corbin Carroll and Ketel Marte will face many of the same pitchers. However, that correlation cuts both ways and is negligible. 

Both promotions state the odds were lower, but thanks to this boost, they now represent value! Since a prop bet on whether a player will get a hit or not is fairly common to all sportsbooks, I shopped around and came up with a consensus line for each of these players to get a hit. Then I removed the vig so I could convert it to probability:

Corbin Carroll: -192 or 65.8%
Ketel Marte: -204 or 67.1%
Corey Seager: -212 or 67.9%

The combined probability of all three of these events happening can be calculated by multiplying the probabilities together. It comes out to 30 percent. At +180 or +200 this is still a horrible bet. 

30 percent at +180 = -16% EV
30 percent at +200 = -10% EV

The vig-free price on an event that has a 30 percent chance of happening is +233. The novice bettor sees BOOST and has a Pavlovian response to want to bet it. That’s PV. A perception of value – but it doesn’t actually exist and results in the bettor being duped into betting in minus-EV. 


The Risks of Perceived Value

This isn’t a new bag of tricks implemented by sportsbooks. This is a well-worn path traversed by marketers since the dawn of the advertising age. Convince the public that your product has value and tell them what that value is. Let them make the mistake of believing you. 

Take a step back from sports betting and think about other forms of marketing. You’re constantly being told that you need to buy this before it’s too late. This price will never be this low again. You would normally pay this price, but due to this special offer, you are getting this incredible deal. It’s Marketing 101. Sometimes, there is legitimate value being offered. However, often you have to see through the offer to determine the actual value.

A retail product consumer can decide if they really need that product or service at that price. Whereas, a sports bettor is typically looking for value or entertainment. Telling them this is good value is like marketing “you can’t live without this!”


Discounting the Side Effects

Another common way that sportsbooks sell you PV is when they discount the side effects. A parlay bet is a good example of something that discounts the side effects. As you’re probably familiar, a parlay bet can be both a tool used for plus-EV or minus-EV. It compounds the house edge or the player edge. However, it also compounds the variance. 

Build a parlay bet and then add an additional leg. Your payout more than doubles. To a novice bettor it looks like a money glitch. You’re adding a coin-flip and increasing the payout by more than two times. In actuality, that’s just because American odds are exponential.


Understanding Variance

With each additional leg of the parlay the variance increases as well. Sometimes it is hard to comprehend the variance of a situation. It may be easier to think about the opposite. The certainty of the situation. Call heads or tails on a coin flip just once, it’s a 50 percent probability. If you are wrong in your predicted outcome, try again. We can both be fairly certain it won’t take long to get one right. 

Now try to call two in a row. That would take you a little longer, but is still viable and shouldn’t take long. Now try to guess three in a row, starting over each time you fail to produce a run of three. It gets progressively harder to accomplish.

That’s just coin-flip variance with no house edge. Add in the uncertainty of sports and the slanted playing field of a sportsbook and your certainty of being able to pick correctly diminishes greatly the more legs you add to a parlay. That’s variance at work. 

For bettors, they are constantly bombarded with the message that sports betting is all about the big win. The perceived value is that sports betting is a way to change their life similar to how a big lottery win would. They are dazzled by big payouts and fail to see the side effects of chasing those big wins. 


The Sharp Sportsbooks Are Losing the Battle

So far it seems PV is only a trick that recreational softbook sportsbooks employ to hoodwink bettors into making bad bets. That’s largely true. The sharp sportsbooks generally don’t use odds boosts, promos, and promises of big payouts to lure in customers. In fact, a common refrain from sharp sportsbook operators is that their price or their product is the promo. 


@jeffreybenson12 Tweet


That’s great for attracting sharp bettors, but it relies on the perception of PV to already be established by the bettor. In actuality, the overwhelming majority of U.S. sports betting consumers are wholly impressionable when it comes to their perceptions.

The product is the promo if the bettor can’t get that product elsewhere. Which is true for bettors who have been limited, but irrelevant for most recreational bettors. Likewise, “the price is the promo” is true if bettors understand the value of finding a better price by shopping around. Again, the overwhelming majority have yet to make that evolutionary leap in their understanding.


How Sharp Sportsbooks can Compete for Perceived Value

Sharp sportsbooks need a blend of sharp bettors to shape their lines and wannabe sharp bettors to bet into their sharp lines. As a result, sharp sportsbooks also need to play the perceived value game. Some operators are doing so with a combination of education and innovation. Not surprisingly, the innovation is coming from the most innovative betting concepts available in the U.S. market, the sports betting exchanges. 


Sporttrade Perceived Value AdProphet Boosts Perceived Value


Both Sporttrade and Prophet Betting Exchange have leaned heavily into advising bettors how to turn recreational sportsbook promotions into guaranteed profits via arbitrage. That alone is nothing innovative. However, the way they do it is the convergence of plus-EV, minus-EV, and PV. 

The recreational sportsbook offers something plus-EV, Prophet or Sporttrade then offers the user the ability to bet the other side and lock in a profit which the user sees as PV. In actuality, the Prophet or Sporttrade side is typically slightly minus-EV. The overall result is plus-EV, but it allows the low-margin exchange to share some of the plus-EV with the bettor while also educating the consumer that the price is the promo at the exchange. Very smart. 


prophet perceived value

Prophet is also tracking the bettors amount saved over time by comparing the price they got on the exchange with the price available at most sportsbooks. This is another good way of quantifying the perceived value that bettors get using an exchange. In talking with Sporttrade’s Alex Kane, I know they’ve considered implementing similar features. It drives home the value of line shopping and helps progress bettors along that evolutionary step.


How to Protect Yourself Against Fake PV

I’ve long held that the single sharpest thing you can do as a bettor is to line shop. Just line shopping will help protect you from being duped by fake perceived value. Often you can quickly tell an odds boost isn’t that much of a boost by seeing what the price is at other sportsbooks. Using an odds screen, like the one here at Unabated, can be a valuable resource.

Next, you need to focus on calculating the EV rather than accepting the PV offered to you. Sportsbooks love to give you PV disguised inside a same game parlay. The black box nature of SGP’s with their hidden correlation effects can be tough to quantify in terms of EV. However, for other featured parlays that seem to dictate PV, use tools such as the vig-removal tool and odds converter calculators at Unabated to price out the EV by multiplying each leg together.. 

Lastly, understand the effects of variance in both minus-EV and plus-EV wagers. Variance can be damaging to an under-bankrolled bettor. If you’re focusing on growing your bankroll, look for EV without major swings in results.

Congratulations, combined with an understanding of EV and AV, your knowledge of spotting and evaluating PV will serve you well in being a more discerning bettor.

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