Whether you’re a casual sports bettor or a passionate gambler who places several bets a day, it’s normal to wonder how bookmakers set the odds.
It’s also important to understand how the betting markets work to help you develop effective betting strategies. This article focuses on the main parameters that bookmakers consider when setting the odds.
The margin – bookmakers must profit
Naturally, oddsmakers consider their margin first when setting the odds since they must make a profit. That’s how they keep their business running to afford their overhead costs and avoid failing in their endeavor.
To achieve that, bookmakers like Betway offer sports betting odds that are adjusted based on probabilities of different outcomes to allow the business to remain lucrative.
If the sports bookies estimated the probability of an event to be 1.60, it’s likely they will set the odds at 1.5. However, bookmakers don’t always make money on every game or every bet, but they always win in the long-run.
More bets at lower odds
At Betway and other leading bookmakers, the odds might be reduced if the total amount of bets is considered too lopsided on a team or player.
The bookmakers don’t like a huge amount of liability based on the outcomes of a single match. Should the game handle on a match be 80% in favor of a single outcome, the sportsbook might suffer a significant loss.
To avoid that, the bookmakers often adjust the odds based on the amount of action expected. For example, let us consider an EPL match between Manchester United and Liverpool where the odds are in favor of the Reds at 2.15, while the Red Devils are the underdog at 3.40 to win.
If that creates a lopsided situation where punters place 80% of their money on the Reds, the bookmakers might reduce the odds for Manchester United.
Remember, when there’s a perfect 50/50 split on both sides of the bet, the bookie is guaranteed a profit. That’s likely what they prefer in a perfect world, so it’s important to research every match and conclude that the implied odds are higher than what they should be to maximize your possible win.
Probabilities
Probability represents the percentage of an outcome happening in a match. That helps bookies to determine how much margin they apply in the bets and the values they give for each bet.
However, punters can determine their expected profit using the formula; (Odds x Stake) = total return – initial stake = net profit.
Other factors
When setting sports odds, bookies also consider other parameters on a game-by-game basis. That includes:
- The teams form: Red hot teams generally feature short odds, while underdogs and those on a downward trend feature high odds.
- Injuries, suspensions, and unavailable players: It’s more difficult to earn a victory without using your best players. A team without key players will have increased odds.
- Match schedule: Teams rotate their players in preparation for crucial matches, which can also increase the odds.
