A bet or odds is the factor used to multiply the bet in the case of a win. Basically, betting odds indicate how the bookmaker assesses the probabilities of possible outcomes.
In this article, the betting odds for football & other sports betting are now explained in detail. How are they calculated, how are they understood and much more.
Bookmakers need to be able to correctly gauge the likelihood of a specific future event occurring. Based on this probability calculation, the bookmaker sets his odds.
Larger betting offices work with extensive statistical material for all types of sports and leagues (for EPL, Champions League, World Cup, Euro, etc., this is relatively easy for fewer options but tasking when offering multiple leagues.
This can lead to great risks for the bookmakers since the wagers are often very high and probabilities are not always calculated correctly. To limit this risk, bets are offered on all possible outcomes, so ideally the gain can be made by arbitrage.
There have been cases of big loses in the sports betting industry. A good example is the 1996 knockout victory of Evander Holyfield over Mike Tyson. The match which was for the World Heavyweight Championships in Las Vegas saw bookmakers and casinos lose $50 million.
How Do Bookies Determine Correct Value Of Odds
There are fixed or variable odds for victory, defeat or draw. If the odds are fair, the bookmaker would have to pay all the losers’ money to the winners.
But the real odds look different. They are lower. This results in the profit of bookmakers. The payout ratio for most betting providers is between 80 and 90 percent.
To determine the value of odds, bookmakers first determine (calculate) the probability for each event. The sum of the probabilities always gives 1. For explanation: For example, a bookmaker estimates the probabilities for the game Barcelona against Real Madrid 96 as follows:
- Barcelona Win: 60% / 0,60 Draw: 25% / 0,25 Real Madrid win: 15% / 0,15.
Then he calculates the fair quotas according to the following formula: Q = 1: W (where Q is the quota and W is the probability) . For the above example, the following rates result:
- Barcelona: 1.67 (= 1: 0.6) Draw: 4 (= 1: 0.25) Real Madrid: 6.67 (= 1: 0.15).
These fair quotas are now multiplied by the bookmaker with a factor that is less than 1. This results in the profit of the bookmaker. For example, if it retains 20 percent of the stakes, the fair odds are multiplied by the value 0.8, and he retains 10 percent with the factor 0.9.
Suppose our bookmaker is particularly fair and repays 90 percent of the stakes as winnings, then he multiplies the odds by a factor of 0.9. The real quotas are:
- Barcelona win: 1.5 (= 1.67 * 0.9) Draw: 3.6 (= 4 * 0.9) Real Madrid win: 6 (= 6.67 * 0.9).
These calculated odds can be specified by the bookmaker in various formats. There are three different formats: the European format, the British format, and the American format.
European/ Decimal Odds
The European format is given in decimal numbers. The quota indicates the ratio of the stake to the possible profit.
The amount to be paid out is calculated by multiplying the stake by the quota. If, for example, you stake $100 in the example above to win Barcelona, the payout amount is $150 (1.5 * $100).
To calculate the profit, you must subtract the bet from the amount paid out. Here, the profit is 50 euros ( $150 – $100 ) or apply the following formula:
100 * (1.5 – 1) .
British/ Fractional Odds
Fractional odds indicate the potential profit. In the example above, the odds would be :
- Barcelona win: ½ Draw: 13/5 Real Madrid Win: 5/1.
It is again set to a victory of Barcelona. The profit results here from the multiplication of the quota with the employment ( 1/2 * $100 = $50 ), the disbursement follows from the following formula:
( quota + 1) * Thus here: (1/2 + 1 ) * $100= $150.
American odds are given as plus or minus odds. The minus odds show the required bet for a profit of 100 units,.
The plus or minus signs have no mathematical meaning here. The calculation of the payout and the profit always takes place with positive values. In our example, the US quotas would be the following:
- Barcelona win: – 200 draw: + 260 Real Madrid win: + 500.
First we bet 100 euros on a victory of Barcelona. The payout amount results from the following formula:
Bet * (1 + 100: Quote), so here: 100 Euro * (1 + 100: 200) = 150 Euro , the profit from this formula:
Bet * (100: Quote), ie here: 100 Euro * (100: 200) = 50 Euro, but you can also simply subtract the bet from the payout amount.
Now if we bet that Real Madrid wins. The payout amount is calculated as follows:
Bet * (1 + Quote: 100), ie 100 Euro * (1 + 500: 100) = 600 Euro.
The profit is calculated using the following formula:
Bet * (odds: 100), ie 100 euros * (500: 100) = 500 euros, but of course, you can simply subtract the amount of payout.
These are the basics for understanding the meaning of football and how they work. As every professional punter knows, understanding football odds is just one aspect of becoming successful.
Proper staking plan, analysis of games as well as bank management iskey to beating the bookies in the long run.