Every year we publish HDAFU simulation tables (Home, Draw, Away, Favourites, Underdogs), which model profit & losses for five seasons in each featured league for developing profitable betting systems.
Today’s article discusses the question what would have happened when backing the underdog playing away from home in the German Bundesliga?
Such a match was played in this league on 23/05/2015 between Moenchengladbach and Augsburg. The best bookmaker odds for the full-time 1×2 market at kick-off were: 1.57 Home; 5.00 Draw; 7.30 Away.
Moenchengladbach were the clear favourites at 1.57; Augsburg the rank outsiders. However, the men of Augsburg won the game, 1-3, defying their long odds.
How regular do such things occur? Is it profitable to bet on outsiders?
Here’s a screenshot from the ‘Backing by Odds’ tab in the simulation table for this league:
In the table above you can see that from a total of 306 matches during 2014-15, the away team won 79 times. (Click on the table to enlarge it in a new browser tab).
79 of 306 is 25.8%, and this percentage shows that the away team won, on average, slightly better than once every four matches.
Profit and Loss Sectors when Betting on the Away Team
Looking at the profit/loss (P/L) summaries in the ‘Totals’ column, adding together the first six rows of odds clusters produces a loss of -2,564 units, based on a flat stake of 100 units per bet.
Essentially this means if the away team was priced as a clear favourite or close to the home team’s prices, they won less frequently than the probabilities indicated by their odds. The last of these first six cluster groups closes at away odds of 2.90.
Look at the second row of the table. The odds cluster between 1.66 (implied probability 60.2%) and 2.00 (implied probability 50%) contains 83 matches and, if the odds had been ‘fair’, 55.1% (60.2% + 50% / 2) of the away teams priced in this group should have won.
As you can see, this was not the case! Of 83 games in five seasons only 43 were away wins (51.8%).
Therefore, punters who regularly backed away favourites in the Bundesliga during 2010-15 surrendered ‘value’ in their bets to the bookmakers. When this happens, only one side of the deal wins in the long-run; invariably it isn’t the bettors!
Okay, let’s take a look at the away underdogs…
This screenshot shows a steep rising curve starting at odds of 4.40 and continuing until odds of 17.0.
Over five seasons, 462 matches fell into this group (Moenchengladbach vs. Augsburg being one of them). The away underdog won 88 times = 19% hit rate!
In these odds clusters the away team won, on average, once in every five matches. The average betting odds were 6.40, representing a probability of 15.6%.
The curve shows, as well as the calculations (19%/15.6% = 121.7%), that the mathematical advantage was on the side of the gambler!
The P/L curve registered 653 units profit at the start of our selected segment and finished at 13,727 units. This is a difference of 13,074 units of profit located solely within the away odds cluster group from 4.40 to 17.0.
Why does this advantage exist? How does it happen?
Backing Low Odds Favourites – Downfall of any Betting System
Most bettors prefer betting on the more popular and ‘emotionally safer’ shorter-priced favourites, but please ask yourself the following two questions:
- How does a profit-oriented company (i.e. bookmaker) set its prices?
- Should the prices (odds) for favourites rise or drop?
Both common sense and business acumen prevail in this situation:
The market dynamics are the following: The more bets expected to be placed on a particular outcome, the more bookmakers reduce their odds. Reducing odds mean that the bettor must risk more money (stake more) to achieve the same financial outcome. The punter therefore pays a ‘higher price’ (gets lower odds) for the same product:
Odds 2.0 → stake 50 = win 50
Odds 1.5 → stake 100 = win 50
Odds 1.25 → stake 200 = win 50
Falling odds means:
⇒ Rising stakes
⇒ Potential to lose more money
⇒ Lower percentage returns should the bet win!
Although this relationship may seem paradoxical, falling odds means rising prices!
Bookies adjust Favourite & Underdog Odds to Public Expectations
To reiterate: Falling odds for an outcome is a clear indicator that this is a favourite. Warning! Dropping odds do not indicate that the statistical probability for the favourite winning the game is improving; purely the fact that the outcome is becoming more and more favoured by bettors. This is a betting fundamental, which many gamblers are totally unaware of.
Falling odds mean bookmakers are effectively raising the price for the product! The product itself does not change in the slightest (i.e. betting on the favourite), but it becomes more expensive to buy. The bettor has to risk more money in order to win the same amount. In this case, you do not get ‘more for your money’, but considerably less!
Let’s use a different example. A confectionery company launches a new chocolate bar, which becomes an instant success. Demand increases; the company naturally takes advantage of the situation by raising the price. You can certainly make the statement that if the price of the chocolate increases it is a ‘favourite’, but the product itself never changes – it’s still a 100g chocolate bar!
The last word here is that since the books have to be ‘balanced’ (i.e. the payout of all three 1×2 bets combined needs to add up to around 100%), whilst the ‘prices’ for favourites are lowered to take advantage of the demand, on the opposite side, the odds for the underdogs rise.