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How do Bookmakers Tick? How & Why do they Set Their Odds as they do?



In an ideal world, bookmakers would like to see the same amount of money (risk) on both sides of a bet outcome. However, utopia is virtually unknown in the world of bookmaking and firms are rarely able to equalise their level of risk on both sides.

Therefore, you will often see a bookmaker adjusting his odds for an event over time. This fluidity aims to achieve an acceptable money line on both sides of the bet outcome.

Please note! Because it is rarely possible to “equalise” the risk on both sides, bookmakers instead look for an “acceptable” level of risk. This is the only ‘gamble’ bookmakers take.

How do Bookies Manage their Risk?

You will have certainly noticed the plethora of various betting offers used by the bookmakers to woo their customers. Unsurprisingly, these are the bets where they expect to make the highest profits (for example, pushing accumulator bets with offers such as, “If team A (usually a short priced favourite) is the one which lets down your five fold, we will return your stake!”) (how generous of them!!).

Bookmakers apply all kinds of marketing tricks to divert the sports bettor into a direction which is most profitable; for them but not for the bettors!

I risk repeating myself but the truth is that bookies’ odds never aim to predict an outcome of a match with utmost accuracy (therefore the calculated probabilities of ‘true’ odds often do not match the betting odds offered in the market). A bookmaker’s main goal is to balance the books and to do this, public opinion is taken into account.

This is the key to bookmaking success. This is the key to sports betting success.

Of course, each sport is different, but in the end bookmaking methods are always the same. Bookmakers make money with these same methods, regardless of the sport or other type of betting event.

  • Their books are not perfect.
  • They do not have a crystal ball.
  • Bookmakers have a business plan!

The bookmakers’ mantra is very simple:

Calculate the statistical chances of the matches for a weekend and set the odds by taking into account the probabilities and public opinion. Collect enough money to pay off losing bets. Keep the profit.

Learn from the Bookmakers!

Bookmakers are not able to balance their books for each single game. To them, it is always about “acceptable” amounts of money (profits or losses) and spreading risk.

The goal of bookmakers is not to predict the outcome of a game correctly. This means that their odds often do not reflect the expected probability distribution.

Bookmakers’ odds usually reflect public opinion about a match and their primary objective is to ensure a well balanced book.

If you wish to become successful with any form of betting you must understand the way of thinking (the business plan) of the bookmakers.

Why? Because these firms survive and thrive from the money they encourage you to lose through nothing more than your own ignorance of how their ‘system’ works.


learn to think like a bookmaker!
deciphering bookmaker mathematics

Last Update: 10 February 2017

Categories:Bookmakers Odds Calculation



20 Responses to “How do Bookmakers Tick? How & Why do they Set Their Odds as they do?”

  1. sarkec
    22 September 2016 at 8:17 am #

    Hello Soccerwidow!

    I would like to ask that if Bayern Munich playing at home, it’s odds is 1.2, what are professional bettors do before kickof?
    They are trying the back high, and lay low or just simply they are waiting the odds to go out of fair odds range and simply lay them? If they are doing this, they shouls have big patient..

    Thanks,

    • Soccerwidow
      28 September 2016 at 9:27 am #

      Hi sarkec, if you are referring to in-play betting then this question doesn’t have a simple answer because it really depends in which direction the odds are expected to move.

      However, if you are into fixed odds betting, and say you have calculated a ‘fair odds’ range between 1.18 and 1.22, and find odds for Bayern Munich of 1.2, then either lay Bayern at 1.15 and hope that somebody will match them after kick off, or back them at 1.25 (or higher).

  2. audiendi
    13 May 2017 at 7:28 pm #

    Hey guys,

    Firstly, I’m really impressed by your site and your diligent replies.

    I’m wondering is it at all common to find overpriced short odds in the 1 x 2 market? Or is it only common for there to be ‘value’ with long odds?

    I’m a beginner. But I want to start placing bets, the thing is I’m a bit scared by the prospect of betting with emotion or looking for upsets and then getting addicted to it. So I’m thinking of using a maths-based system and a more conservative low odds strategy with risk spread across heaps of such, single bets.

    May I also ask, is your value calculator similar to the type that betting agencies use to calculate their estimations of probability (before adjusting their odds for the reasons you outlined)?

  3. Right Winger
    13 May 2017 at 10:27 pm #

    Hello Audiendi,

    You can find value in any size of odds – it is not just limited to the longer underdog (or draw) odds. But beware, perennial betting on favourites is a sure fire way to long term bankruptcy.

    The Value & Probability Calculator is certainly a good start for a beginner. It will enable you to analyse individual matches and find value in a large range of bet types.

    Yes, it is a valid method for calculating probabilities, which you must do in order to find value.

    The HDAFU Tables are also a sound method of betting unemotionally, without needing to know anything about the matches in question. It’s all based on maths and numbers.

    The strongest advice we give to beginners is to master things on paper before committing money on a single bet. If you feel you want to rush in and start betting straight away, then you are not mentally ready to make money in the long run.

    Consider also our Odds Calculation Course, which will teach you how to read and understand statistics, and use them for future forecasting. It’s an unique insight into how bookmakers set odds, and if you want to play them at their own game, you will need to know how they operate.

    Good luck!

    • audiendi
      15 May 2017 at 9:43 am #

      Right Winger,

      Thank you!

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