In Football Betting – Are the Punters Betting Against the Bookmakers?

Most punters believe they are betting against the bookmakers. In fact, they are betting against their fellow bettors. This is represented by the fluctuations of the odds.

Why do odds change? Odds constantly change on an outcome in a particular game in response to:

* number of bets and

* amount of money staked

This is why you can see odds around 2.10 in the morning and get only 1.90 later in the day. For example, if $1000 is staked on Home win, the price for Away win will then go up to make the Away team more attractive for the punters to bet. Through the adjustment of the odds according to the market conditions, the bookmakers’ objective is to balance their books for that event.

Bookmakers do not gamble. They charge a certain percentage of margin for each bet and as long as their books are balanced, they win irrespective of the match outcome. The bookmakers set the odds according to demand and supply to balance the action from all sides and because of the margin, they always win.

In the event a bookmaker could not balance his books through odds fluctuations, he will then reduce his risk by transferring some amount of the bets wagered to other bookmakers that have odds better than his own. This is known in the industry as ‘farming out’. Thus, besides the punters, sometimes the bookmakers also trade on the betting exchanges to balance their books.

If the imbalance of money staked in an event is too great, for example, due to rumor of fixed matches, etc, the bookmakers may remove the event altogether.

So the punters are betting against each other. This means when punter Mr A wins in an event, his win is actually paid for by losing punter Mr B.

This cast the bookmaker in the role of a broker who takes commission on the market and funds the winners from the losing bets.

Secrets of Sports Betting – The Bookmakers Secrets!

During the 1980’s, I was part of a group, that used computers to win millions in sports wagers from Las Vegas Casinos. This was before personal computers were in everyday use. The invention we not call the internet was years away from having access to handicapping stats and data. We were successful for two reasons. First we were ahead of the odds makers in collecting important information. They were still doing things the old way, and we took advantage of that loophole.

Those days are gone forever. The second key to success, is to understand how the numbers really work.

ODDS DO NOT PREDICT THE WINNER

Think of it this way. “Odds do not predict who will win. They are actually predicting who the public THINKS will win.” Most sports punters, both professional and novice, do not understand the secrets of the bookmakers.

Two-way sports wagers, (meaning two teams with a 50-50 chance of winning with no ties) are posted at odds of 11-10. This means you wager £11 to win £10. Half the punters select team A, and collect their £10 when they win. The other punters choose team B, and lose the contest paying their bookie £11. You would think this gives the house or bookmaker a 4.55% advantage. You would be wrong with this assumption, but do not feel bad, 99.5% of the bettors think like you do.

THE BIG MISCONCEPTION

General thinking goes something like this. The bookmakers, insure themselves a profit only by balancing their books. In other words, they hope to get half the bets on each of the teams, thus they win every time. In reality, they hardly ever balance their books, or even come close. Your may find small local bookmakers, with small bankrolls, try to operate in this manner, but with so many internet shops available, even they can even up lopsided books. Many small bookmakers do not even know the secret. They are like the rest of the cattle and travel along with the herd. The erroneous belief that large sports bookmaking operations need to balance their bets is the big secret in the industry. What they do need to accomplish, is secure plenty of volume on both sides, without actually balancing the books.

THE BOOKMAKER’S SECRET REVEALED

Suppose the bettors in our example game, risked $165,000 to win $150,000 on the favourite. But the public only bet $82,500 on the underdog trying to win $75,000. This looks like a mismatch, with the bookmaker heading for big trouble if the favourite wins. If the dog prevails, the sports book makes a profit of $90,000. He wins $165,000 from the favourite bettors, and pays out $75,000 to the Dog winners. If the Favorite wins, the bookmaker loses $67,500. He will win $82,500 from the underdog backers, but lose $150,000 to the fans who bet the favourite. This results in a loss of $67,500.

Now you may be saying too yourself that math does not make the house a winner. So let us review, when the Underdog wins, the bookmaker wins $82,500 but if the favorite wins, he loses $67,500. Favourites and underdogs usually split the winning equally and each side 50% winning of the time. Half of the time he will lose $67,500, the other half he will win $82,500, so his profit is $15,000 no matter who wins. So in our example, what is the bookmaker really risking? The bookmaker is really risking $67,500 to win $82,500. In simple terms, he is essentially laying $75 to win $100. That means he does not have to even win 50% of the time to break even. The house only needs a 42.9% strike rate, after that, it is all profit.

TAKE DOWN A 33% PROFIT NO MATTER WHO WINS

Give me odds of losing $75 and winning $100 on a 50-50 coin flip wager. I will beat you every time with this huge house advantage. To most fans, the general thinking is the bookmaker needs to balance his books with equal wagers. From my example, you can see this is not true. When you have bettors risking twice as much on the favourite side, you are getting a 33% return on every dollar.