Sports betting has evolved extraordinarily over the last couple of decades. The activity is more accessible now it can be completed online, with punters able to actively find bets whenever they want.
These advancements have had a knock-on impact on the odds that are regularly being offered as a result. The industry has had to try to be as competitive as possible, as they recognize how much power players now have. Some bookmakers try to gain a competitive advantage through the odds that they offer.
However, while it is often possible to see slight differences between the prices that are offered by one sportsbook and another, the math and reasoning behind these can often be unknown. Most punters will not be clued up or have the knowledge of why odds can be made available at a different price for the same event or outcome.
There is a simple way to understand how sportsbooks come up with the odds they set and why they can often appear differently online compared to those offered in more traditional methods.
Step 1: Understanding Probability Behind The Odds
The most important factor in the betting process is the question of probability. So, how can one interpret odds? This refers to the probability of a certain outcome occurring during an event for which you are betting.
After a bookmaker arrives at an estimate of what the probability for that result is likely to be, then he can set the value of the odds accordingly. They will pick and choose from the data, history, current statistics and news (and whatever else they can find that might affect their results). These will then be displayed online in three ways: Decimals, fractions (both used throughout Europe), or in the American style of placing a plus or minus sign before a number in the hundreds or thousands.
Step 2: Bookmaker’s Margin
The odds that have been created will always favor the sportsbook from a profitability standpoint. They are in the business of making money, and while not many bets win, they do not want those that do to come with a big margin.
In order to combat this, an online sports betting site will ensure that they have provided a margin on those that are likely to win to ensure they are able to obtain a profit regardless of the outcome.
Step 3: Calculating Odds
When it comes to calculating the odds to use and set, they need to consider the previous steps together. Bookmarkers will determine their margin and then add the probability of the event happening. Once they have determined what percentage they want to use, they can set the odds bettors can wager on. At the same time, they will know they can still achieve a profit and not “lose” too much on the won bets.
Bookmakers will use this method when creating odds for all sports. Therefore, it is very useful information for a bettor to understand and have knowledge of when seeking value in the odds that they can find.
Step 4: Creating a Fair Market With The Odds Set
Occasionally, bookmakers can create what is known as a fair market with the odds they set. These are odds that reflect the true probability of the activity happening but without their margin being impacted.
These are the odds that bettors want to try and capitalize on, as there is a greater chance of being able to obtain a winning outcome. However, spotting them can be difficult without understanding the probabilities that are being used in the first place.
Step 5: Putting Everything into Practice When Using Online Odds
Once probability is fully understood and its use in creating online odds, the next step for bettors will be to try and use the knowledge to their advantage. It is possible to do this by looking around and seeing what odds other bookmakers provide, as this can help find value. As mentioned, it is important to remember that all sportsbooks offer slightly different prices to try and make themselves more competitive.
Final Verdict
Being able to grasp how odds are calculated and applicable in online bookmakers can also give punters a better experience of sports betting. It can also assist individuals in making more informed decisions and determining whether a bet is likely to hit.
