🧪Lab Notes #7 — Expected Value: It Isn’t Predicting. It’s Pricing.

“You don’t lose because you’re wrong. You lose because you keep paying retail.”

Every sports bettor has the same origin story.

One win.
One screenshot.
One dangerous thought:

“Wait… am I good at this?”

That thought has ruined more bankrolls than bad beats, bad refs, and bad parlays combined.

Because the moment you believe betting is about predicting what happens next, you’ve already lost.
Not tonight — eventually. Quietly. With confidence.

Sports betting doesn’t reward people who guess right.
It rewards people who pay less than they should for outcomes that happen often enough.

If that sentence made you pause, congratulations.
You’re exactly who this Lab is for.

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🧭 You’re Probably Playing the Wrong Game

Most casual bettors follow the same routine.

They see a line.
They ask, “Do I think this will win?”
They click yes.
They wait.

That’s the entire strategy.

It’s the betting equivalent of walking onto a car lot, pointing at the first red sedan you see, and saying, “Feels right.”
No price check. No comparison. No idea what the thing is actually worth.

Sportsbooks don’t set lines based on vibes.
They set prices.

And if you don’t understand price, you’re not betting — you’re donating.

Before we deep dive into expected value, let me break it down simply:

Betting without EV is like thinking you’ll find love on The Bachelor.

Fun in theory.
A horrific data sample.
And it ends in tears almost every time.

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🎲 EV in Plain English (No Math Degree Required)

EV stands for expected value.

Not: “Will this win tonight?”
But: “If I made this bet over and over again, would I make money?”

That’s it. That’s the whole idea.

Here’s the stripped-down version:

EV = (Win % × Payout) – (Loss % × Risk)

If the result is positive, the bet is good — even if it loses tonight.
If it’s negative, the bet is bad — even if it wins and your group chat treats you like Nostradamus.

⸻

🍀 Example #1: The Coin Flip That Changes Everything

I offer you a coin flip.

• Heads: you win $120
  
  

• Tails: you lose $100
  
  

True odds: 50/50.

Do the math:

• Win side: 0.5 × $120 = $60
  
  

• Loss side: 0.5 × $100 = $50
  
  

EV = +$10 per flip

You’ll lose half the time.
You’ll feel dumb half the time.

Over 100 flips? You’re up $1,000.

That’s +EV.

Passing on that bet because “I don’t feel great about it” is like drafting a kicker in the 8th round of fantasy football.
You can do it.
Everyone else just understands the game better.

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🎲 Example #2: When the Odds Look Fair (But Aren’t)

Now flip it.

A casino offers 6-to-1 odds on rolling a six with a fair die.

True probability: 16.7%
Implied probability: 14.3%

That gap?
That’s the house edge.

You’re getting paid less than you should be.

It’s like paying $7 for a loaf of bread at the corner store when the grocery store sells it for $2.
One time won’t kill you.
Do it all year and suddenly you’re Googling “why am I always broke.”

This is how sportsbooks win — not by predicting outcomes, but by pricing them better than the people clicking the button.

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🏪 Why Sports Betting Isn’t the Stock Market

Apple stock costs the same everywhere.

If it’s $187.33, that’s the price whether you’re Warren Buffett or a guy Venmo-requesting friends for pizza money.

Sports betting doesn’t work like that.

The same bet might be:

• Book A: −110
  
  

• Book B: −105
  
  

• Book C: +100
  
  

Same outcome. Three prices.

That’s not Wall Street.
That’s a clearance rack.

Here’s the mental shift that matters:

EV lives in the gap between price and probability.

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🧠 The Question That Changes Everything

Stop asking:

“Will this win?”

Start asking:

“Am I being paid enough if it wins?”

That question doesn’t care about:

• hot streaks
  
  

• narratives
  
  

• vibes
  
  

• the guy on TikTok screaming “LOCK”
  
  

It only cares about math and price.

You can lose a good bet.
You can win a bad one.

Over time, only one of those survives.

⸻

🎓 The Big Takeaway

Expected value isn’t about predicting outcomes.
It’s about buying the right price.

Sportsbooks don’t need to know who wins tonight.
They just need bettors who keep paying retail.

If you want to stop being one of them, this is the reset:

• Stop chasing certainty
  
  

• Stop celebrating wins without context
  
  

• Start thinking in prices, not picks
  
  

Because betting isn’t a prediction contest.
It’s a long-term pricing game.

And the moment you understand that,
you finally start playing the same sport the sportsbook is.

L.S. signing off ⚗️

Jared
Lead Scientist — The Prop Laboratory

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🧪 Next Up

Now that you understand what EV actually is, we’ll break down the two ways bettors try to find it — trusting the market versus building their own view of reality.

📊 Up Next: Lab Notes #8 — How the Market Thinks: Top-Down EV

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🧪 Lab Glossary: Key Terms from This Lesson

True Probability Gap
The difference between what should happen (your estimated true probability) and what the sportsbook is charging for. This gap — not the outcome — is where long-term profit lives.

Distribution Thinking
Evaluating outcomes as a range of possibilities rather than a single prediction. Betting isn’t about being right once — it’s about being positioned well across many possible results.

Long-Run Expectation
The result you’d expect after repeating the same decision hundreds or thousands of times. Short-term results are noise; long-run expectation is signal.

Price Sensitivity
How much a bet’s quality changes when the odds move. Some bets are playable only at one number — one tick worse and the edge disappears.

Screenshot Bias
The belief that a bet was “good” because it won and was screenshot-worthy, even if it was badly priced — often followed by silence when the same logic loses five times in a row.

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📘 View the Full Master Glossary
💡 Click here to open The Prop Laboratory Master Glossary
(An evolving index of every term, example, and concept across all Lab Notes & Field Studies — updated as the series grows.)

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⚗️ Foundational Labs (1–6)

Lab Notes #1 — Favourites, Underdogs & The Secret Life of Odds

Lab Notes #2 — Implied Probability: The Hidden Math Behind Odds

Lab Notes #3 — The Vig: The Tax You Didn’t Know You Were Paying

Lab Notes #4 — Line Movement: When the Numbers Start Talking

Lab Notes #5 — The Big 3 Betting Markets: Easy to Understand, Brutal to Beat

Lab Notes #6 — Prop Markets: The Side Door To The Sportsbook

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