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What do betting odds really mean?
Do you really know the meaning of betting odds? Find out how to turn the tables on your bookmaker, so you understand where to place your bets
Published on 17 September 2018
Updated on 17 September 2018
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This one is easy, right?
Most newbie soccer bettors believe that odds refer to how much money you will win if you guess the correct selection; High odds provide a large return and lower odds provide a low return.
Unfortunately, we’ve all been conned to believe the previous paragraph is all there is to know about betting odds. Therefore, many of us are in real danger of losing our money over the long-term. It may not happen quickly, but the slow decline of our bankroll could be very real.
Never risk your money until you understand betting odds and what they mean!
It can be easy to gradually lose money, especially, if you find yourself slipping into a lottery or casino gambling habits. Betting big on high odds is a one-way ticket to the poor house.
Please, please stop betting right now and read the rest of this post before risking any more of your hard-earned cash!
How bookmakers and sportsbooks create odds?
Odds are usually designed by committee and not necessarily accurate in terms of the probability of an outcome. The odds presented within your app of website may not even remotely relate to the REAL probability of an event occurring.
To make matters worse, many of the organisations use third-parties to provide bookmaker-in-a-box solutions, which help companies provide sports gambling services for their customers. The use of background systems provides automated odds calculations on many sporting events.
How does this affect your betting odds?
Your favourite bookmaker or sportsbook may not have the ability to create odds on unpopular events or sporting occasions, which have marginal betting interest.
The reliance on another entity to create the betting odds provides you and I with opportunities, as we may have a much greater knowledge and understanding of the marginal betting markets.
This in-depth understanding of the different markets may not be of much interest to bookmakers, so they often outsource the odds creation and data gathering responsibility while concentrating more on small odds adjustments to ensure their profit levels.
Although this process sounds cumbersome, it’s almost seamless with today’s technology. The odds creation experts provide their part and the bookmaker controls the overall money collection, so the betting industry can provide you with a reliable sports betting experience.
Why would a bookmaker provide inaccurate odds?
It could be a variety of reasons, but the most common seem to be:
1. The bookmaker wants to retain a larger profit margin within the event
2. The bookmaker wants to encourage betting on another market or another event
3. The bookmaker or the odds creators have made a mistake
Believing odds presented by bookmakers can be dangerous
Never take presented odds at face value. An event will always have a statistical probability of occurring, which will present real odds (or true odds) for the event.
The true odds provide you with the mathematical likelihood of the outcome and give you a glimpse at the real value hidden by the bookmaker.
It’s then possible to calculate the true odds value against the bookmaker odds and make a judgement as to the most sensible selection within the real data.
Do bookmaker odds tell the full story?
If you consider a recent match between Liverpool and Southampton at Anfield. You should be able to see a huge difference between the Home Win odds and the Away Win odds, which may well be tempting for some people:
The average bookmaker odds for 1X2 (Home Win-Draw-Win Away) are provided, below.
Home Win: 1.19
Away Win: 14.27
The huge difference between the odds does not consider unforeseen circumstances, which may cause any unexpected moment that can drastically change the game.
Such as, a sending off, an injury a poor referee decision, etc. In each case, the away team is very rarely that far out of favour.
If we use the iwinsoccerbets Match Ratings, we can identify that Southampton has an away Match Rating of 0.67 and Liverpool has a home match rating of 1.34. This signifies the number of goals predicted within iwinsoccerbets for that specific fixture relative to each team’s performance against home or away opposition.
Changing the bookmakers encourage soccer bettors to place bets on the Draw and the Away Win by manipulating the real odds. This allows the bookmaker to make one outcome appear more attractive for punters to risk money on poor value selections.
How to calculate suggested probability based on Bookmaker odds
If we consider the same odds, we can calculate the booker’s suggested probability.
1 / 1.19 = 0.84 or 84%
1 / 6.8 = 0.15 or 15%
1 / 14.27 = 0.07 or 7%
84% + 15% + 7% = 106%
Adding all three percentages together provides a 106% book value, which demonstrates the bookmaker will retain a 6% profit across this selection.
Ideally, you want to minimise bets with a book value over 100%. A book closer to 100% means that the bookmaker will operate on lower margins and wins are more profitable.
All information should be considered before you risk money
Within the soccer statistics database, we include true odds and suggested probability calculations within each team’s Match Rating on the football match preview data pages.
Obviously, every recommendation will not win 100% of the time, but the vast majority of selections will provide a suggested outcome based on the probability and internal statistics used for the different matches, leagues and tournaments.
Understanding bookmaker suggested probability allows you to take more things into consideration before you risk money on unrealistic selections.
You should not only bet based on your potential returns, but also double check the suggested probability of each selection and the expected value of that selection.
Taking bookmaker odds at face value and ignoring how to calculate expected value may negatively affect your long-term profitability. Understanding the longest losing expected losing sequence is also vital for any profitable sports bettor.
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