If you would like to become a successful bettor in any type of betting, you have to study the bookmakers' thought process.
If you want to become a successful bettor, you do not require a good understanding of odds calculation alone, but you also have to be aware of how the market works and specifically how the bookmakers work.
Of course, bookmakers make a living out of fixing odds and setting available prices for certain betting events.
When you view odds in betting exchanges such as Betfair, Betdaq, Smarkets, or WBX, keep in mind that it is not the exchange platform, nor the traders who use them, that set the odds.
The truth is that the bookmakers are utilized as the market lead for traders on the betting exchanges, and it is the bookies who work out and publish their odds weeks (at times even months) ahead of the events in question and most definitely long before the exchanges even open up their markets for trading.
If you have ever calculated odds you will have understood that bookies' prices typically don't represent the 'true' picture, i.e., the 'real' mathematically calculated values (the statistically expected values).
Odds are close to statistical expectations of the betting event only on rare occasions (most probably in less than half of all cases). In the vast majority of games, however, odds are either way above mathematically expected or way below…
Why Is This So?
You must have some respect for the fact that bookmakers don't really want to predict an outcome (correctly). If you are a fan of statistical analysis, then spend a minute doing a straightforward calculation on any league that interests you. It's just convert bookmaker odds to probabilities and compare with the real distribution of the results.
Bookmakers have been around in some form or another for thousands of years. Their single most significant goal is, of course, to make a profit. Bookmakers quote their odds in such a way that sufficient action is being generated on both sides of a bet.
If a bookmaker's odds of betting aren't in line with public opinion then an abnormally large amount of money will be wagered on just one side of the bet. That would be a risk for the bookmaker. Bookmakers are not, however, in the business of gambling on an event.
Bookmakers' work is technically more of an intermediary, a kind of stockbroker. They take money from lots of different individuals on lots of different results and after the game is finished pay out the winners.
As payment for this service, the bookies impose a "charge" known as the overround.
Balancing their books is the most important thing for bookmakers
The closer to the kick-off time of a game, the more 'fluid' the odds actually do become, as pertinent information such as team news comes out, and this then has a domino effect with punters' opinions being confirmed or debunked on the outcome of the game concerned. The odds are thus more likely to change as the start of the game comes nearer and nearer and more money is bet.
Always remember
Bookmakers offer odds in terms of the mixture of statistical probability and common opinion.
Bookmakers do not bet (speculate). They desire to balance the books.
Theoretically, bookmakers would prefer to place an equal amount of money (risk) on both sides of a betting outcome. But utopia does not exist in bookmaking and companies are rarely able to balance their scope of risk on either side.
Therefore, you will notice a bookmaker adjusting his odds for an event with the progression of time. This flexibility is done to obtain an acceptable money line on both sides of the result of the bet.
Pay attention! As it is never feasible to "equalise" the risk on either side, bookmakers settle for an "acceptable" amount of risk. This is the sole 'gamble' bookmakers ever make.
How Bookies Manage their Risk
You will have no doubt noticed the number of various betting offers used by the bookmakers to entice their punters. No wonder therefore, that these are the bets where they seek to make most of their money (for example, marketing accumulator bets with incentives such as, "If team A (usually a short priced favourite) is the one which lets down your five fold, we will pay out your stake!") (how generous they are!!).
Bookmakers use all kinds of promotional tricks to guide the sports bettor in a direction which is most profitable; to them but not for the bettors!
I am afraid to repeat myself but the reality is that bookmakers' odds never intend to forecast an outcome of a match with absolute precision (the reason why computed probabilities of 'true' odds rarely correspond to betting odds available in the market). The primary objective of a bookmaker is to balance the books and for this purpose, public opinion is considered.
- This is the key to bookmaking success.
- This is the key to sports betting success.
Sure, each sport is different, but bookmaking methods always remain the same. Bookmakers become rich using the same methods, regardless of sport or other form of betting.
- They don't have a perfect book.
- They don't have a crystal ball.
- Bookmakers have a business plan!
The bookmakers' slogan is very simple:
Calculate the statistical probability of the games for a weekend and set odds on the basis of the probabilities and mood of the public. Collect enough money to pay losing bets. Keep the profit.
Learn from the Bookmakers!
Bookmakers are not able to balance their books on every individual game. For them, it is always a question of "acceptable" amounts of money (profit or loss) and risk-spreading.
It is not the intention of bookmakers to make a correct prediction of the outcome of a game. That is, their odds do not necessarily reflect the probability distribution you would anticipate.
Bookmakers' odds will typically reflect what the public believe about a match and their primary goal is to achieve a pretty well-balanced book.
To be a success with any gambling you must understand the thinking mechanism (the business model) of bookmakers.
Why? Because these firms remain profitable and profit from the money you lose through nothing more than your own ignorance of the fact that their 'system' is actually operating.
