A Value Bet is a bet where the odds are higher than the probability of a particular outcome. With Value Bets you are removing the small bookmaker margin and therefore gaining a small but crucial advantage. Although many of these bets will inevitably lose, as long as you are correctly identifying bets with a positive Expected Value, given enough bets your profits will steadily increase.
Even if you just placed bets with a small expected value you would still make money over time. This is why casinos can consistently make a profit with BlackJack even though the house edge is only around 0.5%.
Finding Value Bets
Clearly value bets are not profitable for a bookmaker and they constantly change their odds to reflect what they believe are the true odds whilst also including their margin. Most bookmakers also track betting exchanges and as these are more efficient at recognising the effect of new information a big change in odds here will quickly be reflected at the bookmaker. Thankfully, due to the fact that there is such a huge range of markets and sports to bet on, it is impossible for them to always get it right.
Traditionally, professional gamblers would have to have an in depth knowledge and perform an incredible amount of statistical analysis to consistently discover value bets. These days though, there is an almost unlimited amount of data and statistical analysis tools available to everyone. Some sites will even put the hard work in for you and give you a constant stream of value bets.