What Is Expected Payout?
Expected payout is the mathematical average of all possible outcomes weighted by their probability. It is a core concept behind expected value (EV) and is used by professional traders to estimate long-term returns.
In simple terms: expected payout tells you what a bet is “worth” over thousands of repetitions.
Expected Payout Formula
For a back bet:
expectedPayout = (p × profitIfWin) − (q × stake)where:
- p = your estimated probability of winning
- q = 1 − p
- profitIfWin = (odds − 1) × stake
Need help estimating probability? Start with the Betfair implied probability guide.
Working Example
You back a selection at:
- Odds: 3.50
- Stake: £10
- Your estimated win probability: 32%
- Commission: 5%
Step 1: Calculate profit if the selection wins
Profit = (£10 × (3.50 − 1)) = £25 Commission of 5% = £1.25 → net win = £23.75
Step 2: Probability of losing
q = 1 − 0.32 = 0.68
Step 3: Expected payout
expectedPayout
= (0.32 × 23.75) − (0.68 × 10)
= 7.60 − 6.80
= +£0.80
This bet has a positive expected payout and is therefore a value bet.
Expected Payout vs Expected Value
Expected payout and expected value are closely related. EV is expected payout expressed as net profit per bet, while expected payout can include stake return depending on definition. Both measure long-term profitability.
For a deeper breakdown, see the expected value betting guide.
How to Calculate Expected Payout for Lay Bets
For lay bets, payout is reversed. Instead of winning profit if your team wins, you win the backer’s stake if the selection loses.
Expected payout formula for lay bets is:
expectedPayout = (q × layStake) − (p × liability)where:
- q = probability the selection loses
- p = probability it wins
- liability = (layOdds − 1) × layStake
Lay payout becomes especially sensitive when lay odds are high, as liability grows quickly.
Use the Betfair lay liability calculator to keep lay risk in check.
Using Expected Payout With the EV Calculator
The easiest way to measure whether your expected payout is positive is to use the EV calculator: Smarter Trades EV Calculator.
It handles:
- commission
- probabilities
- liability
- payout calculations
Why Expected Payout Matters
Measuring expected payout helps traders:
- avoid negative value bets
- compare different betting options properly
- identify overlays and underpriced favourites
- understand long-term profitability
Related Tools and Guides
- Expected value calculator for quick EV checks.
- Lay liability calculator to understand downside risk.
- Betfair break-even odds guide for pricing benchmarks.
- Betfair trading for beginners for the broader exchange basics.
Frequently Asked Questions
Is expected payout the same as EV?
Related but slightly different. EV is pure profit, expected payout can include stake return. Both are useful decision tools.
Does commission always reduce payout?
Yes. Commission reduces net profit, so expected payout should always include it.
Where can I calculate EV automatically?
Use the Smarter Trades EV Calculator: EV Calculator.