How bookmakers work out betting odds
Whilst sports bettors will be looking for the best available odds that they can find when they want to place a bet on a sporting event that they feel has a good chance of winning, sportsbooks and bookmakers are also looking to be able to win by working out the betting odds to choose.
Ultimately, the main aim for a bookmaker is to ensure that they make a profit regardless of the outcome that happens. Indeed, they will try and do this in a number of different ways, thus trying to be able to work out the true odds of something happening before applying a margin for themselves should an outcome prove to be successful.
So whilst punters are looking to get the best odds online whenever they can, it is important to know that bookmakers and sportsbooks are simply trying to do the same for their own benefit.
How do bookmakers do this?
The first thing that any bookmaker or sportsbook will look to do before they set any market odds for a sporting event is to work out what the ‘true odds’ of a particular outcome happening is. By working this out, it allows for them to ensure they are in a position to be able to still turn a profit, even if the bet placed by a punter is a winning one.
There are a number of factors that will be considered when determining what the true odds of an outcome happening is. For example, when looking at a football match, a bookmaker/sportsbook will take a look at things such as prior form, history, statistics that can play a role in a match, opinions from experts. In truth, the number of factors can be limitless as if it can play a role in providing an outcome, then it will need to be considered.
Once all of the factors have been explored and analyzed, bookmakers will feel that they have the true odds regarding the probability of an event occurring.
The other method that may be used by a sportsbook/bookmaker is via the ‘Fair Book’ method, which is where they offer a bet that equates to 100%. For example, by offering four bets within a market at 25% each, regardless of the outcome. They will then payout at that rate, thus not being able to make a profit, which is why they adjust the odds that are offered.
How do bookmakers set the odds provided?
As mentioned, the odds that a bookmaker or sportsbook will provide to their punters are slightly different to the true odds, with the odds that punters received having been adjusted downwards slightly; however they will not be too watered down, as punters will likely go elsewhere as they will get better odds from another platform.
One way they manage to set their odds is via a method of proportional decreasing. This means bookmakers may look to offer the same rates as the true odds, but in a lower value to ensure they are able to turn their own profit, whilst still offering the competitive odds.
Story by Jon Mayhew