Unfortunately, the answers to these questions only come with time and experience, by acquiring a "knowledge" of a sport and its betting market, and a familiarity with the way bookmakers set their odds. The good news, however, is that whilst bookmakers are very good at setting odds for sporting events, they, like punters, can make mistakes, sometimes very glaring ones, which knowledgeable bettors will snap up without a moment's hesitation. William Hill, for example, astonishingly offered 200/1 on Primoz Peterka, the back-in-form Slovenian ski jumper, to win the opening ski jumping World Cup competition of the 2002/03 season at Kuusamo, Finland, despite the fact that he had won the qualifying competition the night before, and had been double world champion in previous seasons. The true odds, by contrast, were likely to be nearer to 10/1, and most other bookmakers had priced accordingly. Peterka won, and William Hill ceased offering odds for the ski jumping World Cup thereafter. Of course, such large mistakes are relatively rare, but smaller pricing errors do and must exist to account for the few per cent of gamblers who are profiting regularly from fixed odds sports betting.
Punters differ in the methods they use to acquire a sports betting "knowledge". Some like to adopt a more mathematical approach by using rating systems based on past performance to predict future outcomes. Others spend hours each week poring over sports journals and Internet sites to glean as much information as they can about a particular event, including news about the weather, and team or player injuries and morale. Still others base their judgement on a subjective feel for the forthcoming event, relying on an inkling or a hunch about what may happen. And finally there are punters who simply pay others to do the thinking for them, by subscribing to one or more sports advisory services.
There is no right or wrong approach to seeking a betting edge. Ultimately, the best one is the one that works for you, one that returns a profit. However, what each approach has in common is a shared aim of finding "value" in the odds, where the true chance of a win is greater than that estimated by the bookmaker. Many punters fail to appreciate the importance of value betting, preferring to subscribe to the "back winners, not losers" school of gambling. Betting on Liverpool at Anfield to beat Sunderland at 4/11, it might be argued, is surely preferable to betting on Sunderland to beat Liverpool at 13/2, even if the bookie has restricted Liverpool's odds but been generous with Sunderland's. Liverpool, simply, are too good, however poor the price.
This analysis is confused because the punter has failed to assess Liverpool's chance of a win in probabilistic terms, but instead rather simply by whether he thinks they will or won't be victorious. "Winners" cannot win all the time, no matter how much a punter is convinced that they can. The important question a punter should instead be asking is whether the true chance of a winner is greater than that which the bookmaker has unfairly (in his mind), but potentially mistakenly (in the punter's mind), estimated it to be. In other words, is the bookmaker's price greater than that which the punter considers to be the fair price? If it is, then he has found betting value, provided he can estimate prices better than the bookmaker, of course.
A value bettor will be generally unconcerned about backing the underdog, or perhaps more relevantly backing a team which he thinks will not win (underdog or not), provided there is value in the bookmaker's odds. A value bettor estimating the likelihood for the Liverpool win to be 70%, with a 15% chance of a Sunderland win would back the away team, despite believing that Liverpool should win. According to these estimations, the fair odds for the two teams are 1.43 and 6.67 respectively. If the punter is right, and the game could be played 100 times, a 13/2 bet on Sunderland each time would, on average, return £12.50 profit from 100 £1 stakes. By contrast, backing Liverpool at 4/11 would, on average, lose him £4.55. He might believe that Liverpool should win each time, but in this case so does the bookmaker, who has cut his odds. Equally, however, the bookmaker has underestimated the chance of a Sunderland win, offering odds that the value bettor considers, in this case, to represent value.
Since odds are just probabilities, value betting offers really the only way to beat the bookmaker. A punter can back as many "winners" as he likes, but if he fails to take into account the bookmaker's prices, it may not be enough to return a profit. There will always be some losers. Really, the argument about value betting is a hypothetical one. The "back winners, not losers" philosophy is itself inherently all about finding a betting edge. If a punter is finding winners and making a profit with them, it means simply that he is winning more bets than the bookmaker believes the punter ought to be winning, according to the odds the bookmaker had set. If this is the case, the punter has found value and established a betting edge, whether he quantitatively set out to do so or just followed his hunches. Successful betting, then, is really all about understanding and managing probabilities. Know the true chances of a sporting win, and there may be profitable opportunities waiting at the bookmakers. As Geoff Harvey says in his book Successful Football Betting, "Find the value, [and] the winners will take care of themselves."