The number one goal of the sports bettor has always been the same. Beat the bookie for as much money as possible.
This has been the task, but completing the mission has always, and will likely always, be difficult.
Today, we take a look what the bookie considers when they are making odds.
This will include the mathematics that goes into finding the percentage of certain results taking place, which has a massive influence on how odds are set by the bookies.
Intro to implied probabilities in sports betting
Before reading the reasoning behind how the bookie calculates the odds of a sporting event, it’s essential to understand that the bookies set these odds to win in the long run.
The tactic that bookies take to achieve this goal will often involve the manipulation of data called the implied probability.
Implied probability is what determines the value of each betting choice, as it represents the likeliness of that result happening (still with us?)
This number is created by the bookie after extensive research on the match, or generated by an odds compiler, or a combination of both.
These odds are made in order to know how to price the bets, as they are directly correlated with the percentage of possibility for each result.
For example, the implied probability of a soccer match between Barcelona FC and Sevilla FC s shown below :
Barcelona win – 58% implied probability
Sevilla win – 22% implied probability
Draw – 20% implied probability
All of these results equal out to 100%, with each of the three choices representing what the bookie sees as the likeliness of happening.
Once the concept of implied probability is understood, it can be easier to comprehend how the bookie makes their odds.
The math that makes the books
To ensure that their is as little risk as possible, the bookie will inflate these percentages to represent a percentage that is larger than the 100% that was originally calculated above.
This number could be anywhere from 101% to 110%, or even higher for some audaciously overpriced sportsbooks.
This percentage increase will always help the bookie, as the percentage increase will decrease the payout on the result, while in reality, his original percentages (calculated above) are an accurate depiction of the percentages of outcomes.
With the data from our example, we can now go into detail about how a bookie uses these numbers to come up with the odds that you see on your betting sites and slips.
Let’s take a look at the true implied odds again.
Barcelona win – 58% implied probability – Odds (1.7)
Sevilla win – 22% implied probability – Odds (4.5)
Draw – 20% implied probability – Odds (5.0)
Now let’s compare them to the implied odds of a bookie who marked the match up to 109% :
Barcelona win – 63% implied probability – Odds (1.5)
Sevilla win – 24% implied probability – Odds (4.1)
Draw – 22% implied probability – Odds (4.5)
It is clear to see the difference between the decimal odds after the inflation.
If calculated correctly, this boost of implied probability will give the bookie the advantage in the long run.
This tactic is successful because the percentages that are offered and bet on are not accurately representing the odds of the result.
This means that the payout amounts will be less than they should be with each winning bet due to the inflated odds.
This way, the bookie is more protected from having to pay out huge sums of money in the long run, especially on the favorites.
Bookies will jack the prices up on some of the massive favorites, forcing sports bettors to risk unreasonable amounts of money on a small profit.
Quick Bookmakers do this to protect them from bettors who are looking to execute arbitrage betting and other betting schemes that guarantee surefire bets.
This way, it is nearly impossible to find a bet that will let a gambler bet on both teams to make a profit, as well as makes it more difficult to string together profitable bets.
One big detail to always remember to take into account is the adjustment the betting line will take as money begins to come in on certain results.
The betting line will move as a result of where the money is flowing, making sure that the bookie does not take too many bets on a certain result.
How to beat the odds
Now that you know how the bookie makes the odds of a match, it is time to figure out the strategy that will beat their tactics.
One tactic that can be useful is the reverse-engineering of a betting line.
Now that you understand how implied probability works, it’s time to use this knowledge against the bookie.
To find what implied percentage the bookie is taking into account when creating the odds, simply divide 1 by the decimal odds, and multiple by 100.
This will allow the bettor to map out a bookie and how he pictures an upcoming match or game.
If the implied probability percentages add up to a sum that is less than 105%, you have found a fairly priced bet.
While this is never essential, these fairly priced bets will benefit your bankroll in the long run, as it is a closer representation of the actual odds.
Once you find a game that has decent implied probability, it comes down to doing your homework on the matchups at hand.
In truth, there is many ways to beat the bookie, but each strategy is dependent on a different variable.
Each bettor will have a different bankroll, different sport to bet on, different tactics, and so on.
Most successful bettors often develop similar traits or characteristics.
These traits may include having that one go-to sport that they are an expert on, relentless work ethic while researching bookie odds and team/player results and performances….
and a certain unique spin on a profitable strategy.
We hope this information helped you better understand the way that bookies make and set their odds, and how you can possibly develop a tactic to beat them.