How to Find The True Odds - Five Devigging Methods Compared

In the intricate world of sports betting, the concept of devigging is a vital tool for bettors aiming to find value and increase their chances of success. Devigging is the process of removing the vigorish (vig) added by sportsbooks to derive the underlying true probabilities of outcomes. This allows bettors to identify positive expected value (+EV) wagers by comparing the odds offered by the sportsbooks to the true odds of the outcome. However, choosing the right devigging method can be complex, as each method varies in its approach and assumptions. In this article, we will delve into the different devigging methods and analyze their strengths and weaknesses.

Understanding Implied Probability

Implied probability converts betting odds into a percentage chance of an outcome occurring. This probability includes the sportsbook's margin, providing insight into how the market views the likelihood of each possible result. Monitoring changes in implied probability as odds shift can provide bettors with clues about market movements and help optimize bet placement.

However, implied probability does not always match the true statistical likelihood of an outcome—it reflects the market's view, which can be influenced by factors such as public sentiment and sharp money. The sum of implied probabilities across all outcomes generally exceeds 100% because of the vig. Hence, eliminating the vig is essential for assessing potential betting value.

Evaluating Devigging Techniques

There are several popular methods for devigging sports betting odds, each with its own characteristics and assumptions:

1. Multiplicative Method

The multiplicative method is widely regarded as the standard approach to devigging due to its mathematical simplicity. In this method, the vig is distributed proportionally among each outcome, with higher implied probabilities receiving a larger portion of the vig. While straightforward, this method may overlook bettors' common tendency to overvalue long shots and undervalue favorites, thus potentially skewing probabilities.

2. Additive Method

The additive method divides the vig equally among all outcomes. This method helps correct the favorite-longshot bias, but can sometimes lead to negative probabilities for underdogs if not applied carefully. As a result, understanding the market context is crucial when employing this method.

3. Shin Method

Utilizing an iterative algorithm, the Shin method seeks to address the favorite-longshot bias more effectively. It adjusts odds based on observed betting behaviors, aiming to improve predictive accuracy, especially over the multiplicative method. It is equivalent to the additive method for two-outcome markets.

4. Power Method

The power method enhances both additive and multiplicative techniques by raising probabilities to a constant power. This ensures that devigged probabilities maintain valid ranges, avoiding feasibility issues seen in other methods. The power method may overcompensate for longshot bias, leading to excessive adjustments for low probability outcomes.

5. Worst-Case Method

The worst-case method takes a conservative approach by combining all previous methods and selecting the one with the lowest implied probability. This method is ideal for risk-averse bettors who prefer to err on the side of caution, ensuring that they are not overestimating the likelihood of any outcome. While more comprehensive, the worst-case method may not always be practical due to the complexity involved in evaluating each individual outcome. However, it provides a safety net by catering to conservative betting strategies.

Making the Right Choice

Choosing the optimal devigging method depends largely on the specific market, sport, and bettor preferences. Understanding the strengths and limitations of each approach is essential for any +EV betting strategy. Analyzing large datasets to determine the predictive power of different techniques can further inform your choice and enhance betting accuracy.

Leveraging these devigging methods allows bettors to identify and capitalize on mispriced odds in the market. By aligning your devigging strategy with evolving market conditions, you can increase your betting success and uncover valuable opportunities in sports betting.

We have created a No-Vig calculator. This tool assists you in making well-informed decisions by calculating the Vig, Fair Odds, Implied Probability, Expected Value (EV), and suggesting optimal bet sizes.

In conclusion, mastering devigging techniques is a cornerstone of smart betting. Whether you prefer the simplicity of the multiplicative method or the nuanced adjustment of the Shin method, each offers unique benefits. Tailor your approach to the specific betting scenario and refine your strategy to maximize your edge in the market. For the most conservative gambling approach, the worst-case method provides the safest bet, giving you peace of mind in ensuring accurate probability estimations.

You can find more information about the previously mentioned algorithms on this research: Clarke, Stephen. (2017). Adjusting Bookmaker’s Odds to Allow for Overround. American Journal of Sports Science. 5. 45. 10.11648/j.ajss.20170506.12.