Betting Odds Explained
A big part of learning how to effectively bet on sports is learning how betting odds are determined and what they indicate about a game or match that is scheduled to be played. Online bookmakers do not create their odds and/or betting lines in a vacuum. There is actually a lot of work that goes into setting an appropriate line or odds on each and every game and match. The slightest error could end up costing a bookmaker millions of pounds or dollars.
How Odds and Betting Lines are Determined
The biggest advantage a bookmaker has is they don’t get emotional about the process of setting odds or betting lines. Their responsibility is to find the odds and betting lines that balance the action on both sides of every game or match on the board. If they can successfully pull off this balancing act, they can sit back and collect the vig (commission) or odds differential regardless of which team wins.
The process of setting betting odds and betting lines is two-fold. First, the bookmaker and their minions will scour over mounds of statistical data that will eventually shine a spotlight on the probability of each team winning a particular game. Based on this output, preliminary odds or lines are set. From there, a small group of experts will interject any possible intangible information that should be taken into account. This intangible information might relate to possible weather conditions, injuries or news information on a team or players. After all possible adjustments are made, the official line or odds gets posted.
Betting Odds Explained
As indicated above, there are two very different ways that bookmakers try to balance the action on a particular game or match. For individual sports like boxing, golf, tennis and darts, as well as low-scoring sports like European football and Major League Baseball in the US, betting odds or a money-line is the preferred option. On team sports with a higher number of points involved, betting lines or point spreads become preferred. This would typically include sports like college and pro American football, Cricket, Rugby, Aussie Rules Football and basketball. Let’s take a further look at each option.
Betting Odds or Money-line – In all cases, the favorite in a game or event can be identified as the one with the lowest odds. Look at the following odds on a typical soccer match:
Manchester United +200
In this case, Manchester United would be considered the favorite and the better of the two teams under the circumstances of the game. It does not mean they are the better overall team, just possibly the better team for this particular game with all things considered. Here’s another example:
Manchester City +350
With the minus (-) odds being the lowest odds, Liverpool would be considered a heavy favorite to win the game.
When the odds are stated as a minus (-), a bettor would be “laying” the odds to the bookmaker. If the odds come with a plus (+), the bettor would be taking the odds while the bookmaker is actually laying the odds. By definition and assuming betting increments of 100, odds of -120 means the bettor would have to bet 120 in order to win a net of 100. Conversely, odds of +120 means the bettor would win a net of 120 with a bet of 100.
As the action starts coming in, bookmakers always have the option of changing the odds to entice future gamblers to come with action on one side or the other. As mentioned above, bookmakers would do this in an attempt to keep the wagering balanced between the participants, which would give the house a significant statistical chance of winning regardless of the outcome. If early betting is greatly skewed in one direction, there’s a possibility the bookmaker made a mistake in setting the odds and will want to make the necessary adjustments.
Betting Lines or Point Spreads
On team sports where a significant number of points are likely to be scored, bookmakers find it easier to bring teams closer together by setting a line based on points. When this is done, the actually odds are equal with a commission built in for the bookmaker. The commission is also known as the vig. Using the 2017 Super Bowl as an example, lets review an example of how a betting line works.
The New England Patriots are listed at -3 points and betting odds of -110.
The Atlanta Falcons are listed at +3 points and betting odds of -110.
By definition, the Patriots (the favorite) have to win the game by more than 3 points to be declared the winner of the bet. If the point differential is only 3 in favor of the Patriots, the bet is considered a push or a tie and all wagers will be refunded. If the Patriots win by less than 3 or lose the game outright, the Falcons will be declared the winner for betting purposes.
If the bookmaker is able to balance the action on both sides of the game at -3, they stand to win 4.55% commission on everything bet on both sides. Example: 22,000 to win 20,000 is bet on New England and 22,000 to win 20,000 is bet on Atlanta. The bookmaker collects 44,000 on the game. No matter which side wins the bet, the gross payout is going to be 42,000 and the bookmaker keeps 2,000. That’s 4.55% commission with absolutely no risk for the house.
As the action starts pouring in, the bookmaker again has the option to start adjusting the line to draw more action in one direction or the other. As a side note, there are a couple of “key” betting lines in American football. Those numbers are 3 and 7. If an original line was set on one of these numbers, the
bookmaker might opt to change the betting odds instead of the point spread. Coming off the 3 or 7 could put the bookmaker at risk of losses if the game in fact landed on the stated number.
That’s betting odds explained. The hope is you have a clearer understanding of how bookmaker operate and how to properly assess you risk/reward situation whenever you want to place a sports wager.