Coin Flip Example

Consider a coin flip. The true probability is 50% for heads and 50% for tails, corresponding to decimal odds of 2.0 and american odds of +100. If a sportsbook offers odds of 55% probability (1.82 decimal, -122 american) for the coin to land on heads, you would lose money over time. This is because you would win 50% of the time and lose 50% of the time, so you would win $82, lose $100, win $82, lose $100, and so on. However, if they offer odds of 45% probability (2.22 decimal, +122 american) for the coin to land on heads, you would win money over time. You would win $122, lose $100, win $122, lose $100, and so on. Value bets guarantee profitability over an infinite number of bets.