There has become more and more competition for the online sportsbooks and mobile betting has seen the industry reach a much wider platform of client.
Sportsbooks have had to ensure that they are a well-known provider and reach a wide demographic of clients with easy-to-use online sites with a wide range of betting options for punters.
It is vital for sportsbooks to therefore also offer competitive odds to ensure people choose their service. To lose out to competitors due to poor calculations of odds would set a sportsbook back and struggle to identify new clients.
Once ruled by the Vegas oddsmakers, the system has changed a lot especially since the rise of betting through mobile devices and in play odds.
The aim of the sportsbook, though its algorithms and calculations, is to balance the action on both sides of the wager. Odds are set to attract equal betting on both sides of the betting line, which gives some a return and others are giving the return to the bookmaker. The bookmaker will always take into account their profit margin when factoring the odds.
No more is the gut feeling a big part of the system for calculating odds, mathematicians and statisticians play a big part in forming the odds through data. They are able to identify the true probability of an event occurring and create odds which is then adapted to ensure it profits the bookmaker regardless of the outcome.
When bookmakers set their odds the add a margin, for example 5%, to incorporate its commission. The margin is referred to as the Vig or the Overround. The betting company calculate the probability of each outcome and the subtract the margin.
They can predict the probability based on history, forms, statistics and public opinion. With more data comes the chance to get a better understanding of the probable outcomes and therefore offer a better price.
With an example of placing a bet on college basketball, the punter will be offered odds set from the form of the team as well as a number of alternate factors. Due to the high reporting and statistical information available, sportsbooks can factor in all the additional information which can aid in their research. Injuries to players, number of three-point shots scored, number of rebounds given up, suspensions, there is so much available that the statisticians and mathematicians are able to calculate the probability of the final outcome.
Where there is an event with two possible outcomes, like the coin flip before a football game, the naïve amongst us would assume the odds would be 50/50. In this case, to include the Vig, sportsbooks may offer odds of 10/11 (1/91 decimal) on either team to kick off. In this instance if you put $50 on both sides it would cost $100 in total but the most you would receive back would be $95.50.
As well as setting the odds through probability and statistics, changes can be made based on the amount of activity for specific bets. As the bookmaker produces it initial odds, these can change depending on a number of external factors.
In the instance of a manager being fired from a hockey team, odds will be set on his replacement. These odds will take into account who is out of work, the style of the team and the way certain coaches will fit within the organization.
Changes to these odds will occur when some people rule themselves out of the running, if they take another role or the club makes a statement on changing its philosophy going forward. Along with this, if a large number of bets are placed on a specific person to be hired, there may be information circling from within the organization that they have a preferred hire.
In these situations, the odds will change to reflect poorer pay-outs on the favorite and wider odds on the other candidates to attract more bets to the other runners and away from the favorite.
Competition between the betting sites themselves are also factors when it comes to setting the odds. It forces each sportsbook to offer the best odds possible that they feel they can still make money with. They are competing for the attention of everyone looking to place a bet on sport which makes the market a positive one for the punter.
Everyone who is looking to register with a provider will be advised to shop around, find the one that best suits their needs, but above all has the best odds on the games they want to bet on. With this, bookmakers have to take into account their client’s activity and the way in which people gamble when calculating their odds.
As with every customer-based industry, the provider must ensure that the client is happy, and in this situation, a happy customer is one who finds the best odds.