Have you ever wondered how the odds are set on a sports match? What makes bookies decide to offer a home win at 1.85 odds and not, say 1.77? If you hadn't t thought about this till now, perhaps it's time.
Without exaggeration, odds sets are the skeleton key to the entire betting industry. The "price" of your potential profit, is the most important thing to look before you place a bet. This means that you should not be on the lookout for “a safe winner”, but instead for valuable odds.
The procedure of calculating the “right” set of odds is really exciting once you get the hang of it, as it is derived from many things: Numbers, news, information, instinct, experience and, of course, the power of money.
In the leaders footsteps
In a perfect betting world, every bookmaker would set the odds himself and not be influenced from competitors. This would lead to every online bookmaker having different sets of odds on the same match. Some sets of odds might actually have a significant difference among them.
Unfortunately, we have to do a quick reality check. Creating the right set of odds out of thin air is extremely hard and can only done by a select number of bookies; the betting market’s cream of the crop. Leading online bookmakers usually post their odds really early and tend to affect inexperienced bookmakers, who usually copy them.
Nowadays, in the “globalized” betting world, with news and numbers travelling within seconds, it’s uncommon to find huge differences in odds on the same match. Some bookies do not employ an “odds deriving” department at all. They just replicate odds sets from leading online betting companies and adjust them according to their commission percentages.
Top 3 Bookies
Software and personal touch
A typical bookie’s week is spent setting odds on the upcoming weekend clashes. It’s common nowadays to actually find these odds even on the preceding Monday. In some leagues bookmakers offer odds sets two matchdays ahead. This action surely adds a lot of risk in their business, however it's a chance they are willing to take to entice more players.
So, why does a bookie choose precisely 1.85 odds instead of, let’s say, 1.80? Make no mistake, this difference in odds might seem insignificant, but in his eyes it’s a huge one. Imagine you’re a bookmaker and you’re watching the vast majority of punters backing these odds. If you accept bets that total €100.000 on 1.85 odds and they win, you have to pay out €85.000. If the odds had been slightly smaller, for example 1.80, you'd pay out €80.000. This small margin can make or break a bookmaker, especially newcomers in the industry.
The first rule of odds setting is: There are no rules!
Obviously, a bookie pays attention to a series of numerical factors and data, however, there is no strict set of rules he must follow. Although he’s always connected to his news compilers, trying to be informed on even little detail of the tie, he can interpret this information any way he wishes.
Let’s imagine the bookie as a master chef. He has to acquire certain ingredients that form the basis of his recipe. However, it comes down to personal choice if he decides to add a special ingredient to create a signature dish. The same applies to bookies: Although they utilize the same data as anyone else, they will add their personal touch on the odds in order to distinguish them.
Raw odds - Where it all starts from
The raw material a bookie has to deal with are generally called "raw odds". These odds are derived straight through powerful software that takes into account considerable amounts of data. Anything that has even a remote connection to stats is included: Points, exact number of wins and losses, goals, home/away performance, winning or losing series and previous meetings.
As soon as the bookie receives these raw odds, he starts adjusting them by taking notice of certain unaccountable data. Latest news is a crucial factor, such as injuries, suspensions and absences. He also accounts morale (for example, if a team recently fired their head coach) and motivation especially in closing league fixtures. Last, but not least, the so called "winner's mentality". As we all now, the history of certain clubs allows them to be overly respected and some times over-estimated by their opponents.
The next thing a bookie will do is implement the commission, also known as "the vig". This commission is not the same on every bookmaker, but it's always present in the odds. In a “no commission” betting world a balanced set of odds would look like this: 3.00-3.00-3.00. Unfortunately, in our world even the most balanced match will be offered in 2.90-2.90-2.90 odds. This 0.10 odds difference, corresponds to what the bookie will keep for himself. If he gets a €1000 stake on every possible match result outcome he will have netted a total of €3000 and only have to pay €2900 to the winners. The remaining €100 will be his profit for organizing the game.
Some bookies will first let some selected customers access their odds before offering them to the public: High rollers, VIP’s, or some extremely loyal customers. These players have a specific bet limit on the so-called “early odds”, that lets bookmakers draw better conclusions on how people will assess these odds. If he sees that certain odds receive large amounts of bets, he will balance them out. However, in few cases, he will take his chances and offer the odds exactly like his first estimate, simply because he is confident that any tempting odds won't be confirmed.
Odds for the masses
The last and most accurate judge for the odds sets are the masses. If a bookie offers a set of odds and sees that certain outcomes are being overwhelmingly backed, he will adjust them, so that money is diffused on other odds as well. This happens regardless of the bookie’s match estimation, as he is simply trying to secure his commission.