How bookmakers calculate odds
Many beginners are trying to understand how bookmakers calculate odds. Why do they offer 1.15, not 1.50, for the victory of the conditional «Barcelona»? In this article, we will tell you in detail who puts up quotes, what they depend on and why they can change every minute.
Bookmakers calculate odds in several stages:
- receive analyst reports;
- set a margin;
- compare quotes with competitors;
- monitor changes in the balance of forces;
- equalize the load.
The work of analysts
It all starts far beyond the BC — in international analytical agencies. Experts evaluate the probability of each outcome, focusing on many factors:
- statistics of face — to — face meetings;
- indicators by season, etc.
At this stage, the bookmaker receives not the odds, but the probability as a percentage. For example, in a match between Barcelona and Real Madrid, the Catalans have a 43% chance of winning, a 20% chance of drawing, and a 37% chance of losing. This is just the tip of the iceberg – then bookmakers work with numbers.
Equal Chance Market
We will not go into mathematical calculations, but give a banal example. Some bookmakers take a bet on the markets of equal chances (which team will touch the ball first, throw an out, etc.). The probability of such an outcome is 50-50 (coefficient 2.0).
The player will not find such quotes in the betting line. The maximum coefficient that the bookmaker offers to the market of equal chances is 1.95. But this is very rare. Usually the coefficient for such outcomes is 1.85. This means that the bookmaker in the first case laid 5% margin, and in the second – 15%.
Why does each bookmaker have a different margin
Any bookmaker uses margin. This allows the BC to make a profit on a regular basis. Its size is influenced by three factors:
- The number of players. Top bookmakers, who have a solid customer base and millions of turnover, do not lay a huge margin. They have a small but stable percentage of a large number of bets.
- The popularity of the event. For exotic leagues or sports, the bookmaker always lays down a larger percentage of margin. This is how BC tries to protect themselves from professional players who are well versed in these competitions. The margin for popular events is often ridiculous. This attracts more customers. Buk earns money in such markets due to huge cash flows.
- The policy of the institution. Some bookmakers rely on the ignorance of newcomers, so they set a dragon margin. Similar lines are found in little-known BC, which cannot boast of a large number of customers.
Why do the odds change before the game
Bookmakers often set odds a few days before the match. During this time, anything can happen: someone was caught doping and disqualified, someone was injured, the match was moved to another stadium, the coach was fired, etc. Any change affects the alignment of forces and coefficients.
What is a program
Progruz is a situation that forces the bookmaker to adjust the odds due to the huge money bets of players on a specific event. The ideal option for BC is an even distribution of bets on opposite outcomes. This guarantees the bookmaker a profit in the form of the notorious margin.
The office is trying to level out a significant financial bias. Its task is to equalize payments for opposite outcomes as much as possible. For example, if in a tennis match a bookmaker has to pay 100,000 rubles for the victory of one player and 100,000 rubles for the victory of another, then the institution is guaranteed to make a profit.
If you need to pay 150,000 rubles for P1, and only 30,000 rubles will have to be paid for P2? Here the problems begin – the bookmaker may remain in the red. To equalize the amounts, it is necessary to force players not to charge on P1 — to lower the quotes, making the bet less attractive against the background of competitors’ offers. The second way is to raise the value of P2 to lure customers.
Equalizing the load looks simple and clear: make one game profitable, the other – not. When bookmakers calculate the odds repeatedly, they need to exclude forks again.This stage attracts arbitrageurs — noticing the progress, thousands of players begin to scan the lines to find a fork in another BC.