How bookmakers calculate odds in sports betting: types, line and margin addition
It is easy to find a mistake in the bookmakers’ odds, but it is almost impossible to punish them for it. We explain the scheme of the BC.
One day bookmakers came up with an ingenious mechanism for calculating coefficients and are still getting rich. In this article, we will analyze where bookmaker https://ca.parimatch.com/ take the coefficients from, how they put a commission in them and why they are constantly changing them.
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What is the coefficient in sports betting
Coefficient — the probability of a particular outcome, taking into account the bookmaker’s margin. Use the coefficient to determine the possible payout and net profit in case of a successful bet.
In Russia, the European coefficient is convenient for most players. It is written in decimal, usually with two digits after the dot.Determine the possible payout by multiplying the bet amount by the coefficient in the bookmaker’s office.
The margin in sports betting is the bookmaker’s commission embedded in the coefficients.Calculate the margin as a percentage using the European coefficient using the formula:
(1 / K1 + 1 / K2 + 1 / Kn – 1) x 100, where K1, K2, Kn are the coefficients for the outcomes of one market, n is the number of elections in one market.
Read more about what margin is in bookmakers here:
What is the margin in sports betting: how to calculate the bookmaker’s commission, formula and examples
For example, in the Spartak — Dynamo hockey match, the bookmakers gave a coefficient of 3.03 for the home team to win in regular time, 4.04 for a draw and 2.17 for the guests to win.
Imagine that you decided to place a bet of 1000 rubles on the victory of the hosts with a coefficient of 3.03. In case of a victory of Spartak in the main time, the payout will be 3030 rubles: 1000 x 3.03.
The main types of odds for betting in bookmakers
Let’s consider two other types of coefficients from the three main ones and how to translate them into European:
Write it down with a regular fraction. Determine the potential profit when betting on British fractional coefficients by multiplying the bet amount by the fraction value.
Imagine that in a football match “Locomotive— – “Zenit” you bet 500 rubles on the victory of the hosts with a coefficient of 5/2. If Lokomotiv wins, the profit will be 1,250 rubles: 500 x 5/2. You will receive 1,750 rubles: 1,250 + 500.
Convert the British coefficient to the European one using the formula:
Ke = Kb +1, where Ke is the European coefficient and Kb is the British one.
- They are written as an integer with a minus or plus sign.
- The plus American coefficient shows a potential net profit with a bet amount of 100 rubles.
The negative American coefficient shows how much you need to bet for a potential net profit of 100 rubles.
For example, in the Daniil Medvedev — Paolo Fognini tennis match, the bookmakers gave a coefficient of -417 for the Russian to win, and +320 for the Italian.
With a bet of 417 rubles on Medvedev, you can get 100 rubles of net profit. And it is enough to put 100 rubles on Fognini in order to get 320 rubles of net profit if the Italian is successful.
Convert the plus American coefficient to the European one using the formula:
Ke = Kap / 100 +1, where Ke is the European coefficient and Kap is the American plus.
Convert the negative American coefficient to the European one using the formula:
Ke = 100 / (-Kam) +1, where Ke is the European coefficient and Kam is the American minus one.
- How bookmakers calculate the coefficient of a particular outcome
- The coefficients are calculated in three steps.
Probability. First of all, bookmakers use the work of analysts who determine the probability of an event. BCS purchase data from analytical agencies or trust the opinion of their employees.
Calculation of coefficients. The results obtained are translated into coefficients.
Bookmakers put the margin in the odds to be in the black at the distance.
Imagine that in the Barcelona — Sevilla football match, analysts estimated the home team’s victory at 68%, the away team’s win at 10%, and the draw at 22%.
For European coefficients, you need to divide 100 by each probability.
The line of the main outcomes of the match will look like this:
P1 for a coefficient of 1.47: 100 / 68.
X for 4.54: 100 / 22.
P2 for 10.00: 100 / 10.
For example, a bookmaker wants to set a margin of 6%. Then the sum of probabilities will no longer be 100%, but 106%.
These extra 6% will be distributed depending on the chances calculated earlier:
4.08% to the victory of the hosts: 6% x 0.68. Became 72.08%: 68% + 4.08%
1.32% to draw: 6% x 0.22. Now 23.32%: 22% + 1.32%
0.60% to the guests’ winnings: 6% x 0.10. Will be 10.60%: 10% + 0.60%.
Then the bookmaker puts the odds in line, taking into account the margin:
P1 for a coefficient of 1.39: 100 / 72.08.
X for 4.29: 100 / 23.32.
P2 for 9.44: 100 / 10.60.
Correction of coefficients when the line is released
Bookmakers change the set odds for several reasons.
Comparison of odds in different bookmakers
The bookmaker pays attention to the coefficients of the outcomes of sports events in other BC. In order not to create forks, the coefficients are adjusted.
A fork is an opportunity to bet on the outcomes of one market with a guaranteed profit.
Read more about forks in sports betting here:
- What is a fork in sports betting: how does this strategy work for bookmakers
- Changes in the balance of power in the match
Analysts constantly monitor up-to-date information in order to re-evaluate the chances of rivals in case of changes.
Imagine that the day before the Barcelona — Real Madrid football match, it became known that Lionel Messi would miss the meeting due to injury. In this case, the bookmakers will increase the coefficient for the victory of blue-garnet and lower it by “cream”.
A pro-load in sports betting is a change in the coefficients with a large number of bets.
For example, in the Novak Djokovic – Rafael Nadal tennis match, the coefficient for the Serb’s victory was 1.51, and for the Spaniard 2.54. Due to the large number of bets on Djokovic, the bookmaker lowered the coefficient for the Serb’s win to 1.38 and increased it to 3.05 for Nadal.
Read more about what progruzes are in sports betting here:
What is progruz in sports betting: how does the cash flow affect the coefficients in the line
The coefficient in the bookmaker reflects the opinion of analysts and includes margin. Bookmakers react promptly to changes affecting the outcome, and due to the margin they are in the black at the distance. For profit at a distance, you should evaluate the chances better than a team of professional analysts.