It is obvious to any fan of the gaming odds of the different events are based on impeccable logic. The most likely a result of winning, the lower the odds with the betting house. In addition, vice versa, the lower is the probability that a team wins, the higher your final victory is evaluated; that is to say, the bookmakers’ odds are a reflection of the more plausible outcome of the event.
To be able to present a proper odds for the betting house have to collect and generalize a large amount of sports information. Because of the study and analysis of the information collected on the bookmaker specifies the probability of all the results. In practice, this might look like this:
The match Stoke City – Wigan Athletic is imminent. As a result of the analysis of the statistical data and taking into account the current physical condition of the members of the team, the home of betting has come to the conclusion that the probability that the outcome of the event is the following:
Based on these probabilities you can easily calculate the corresponding probabilities. The odds of an outcome is calculated by dividing 100 by the percentage specified. For this example, the following is obtained:
The probabilities are calculated correspond to the theoretical probabilities and is called the fair odds. However, the odds we would find with the betting house are really different from the fair odds. What are the reasons for this? First, we will go through in the business model of the bookmaker in the circumstances of the fair odds. In theory, the perfect choice for the bookmaker is to take bets from their customers in all the results of the event, so that they can pay the winners using the money of customers who have not guessed correctly. This is to say that it is desirable that the total amount of the bets on the various results is balanced according to the odds. For a concrete example, if the sum of all bets were $100, then your perfect layout would be the following:
This distribution could only happen in theory. Things are different in practice. Organizer of the betting, the bookmaker has to pay you all the profits. It is also necessary to make a profit in order to keep your company. If the stakes for the fair odds were evenly distributed, the bookmaker would pay 100% of the funds raised that would make their meaningless activity. What is more, the actual distribution of the bets is very different in practice from in theory, due to gamblers ‘ preferences for the teams that are favorites. This always presents a potential risk to the betting house. In reality, there are many cases in which the bookmaker pays more than what he has collected. For certain periods of time betting house firms could run at a loss of what is necessary for them to have the money in reserve. It is also in the interests of the punters to work with financially stable bookmakers who will always be able to pay. It is an undeniable need for the bookmaker to earn a profit that is included in the odds that he offers and this benefit is called margin.
Several sources of information you can also find the terms juice or voguish (vig). In essence, the profit margin) is the sum, which would remain for the bookmaker in the case of a theoretical distribution of the bets in accordance with the odds. The margin is in percentage terms and is calculated as a correlation between the amount of the winnings and the total amount of the bets. Let us return to the example that we have discussed previously in terms of fair odds. We’re going to include a margin for the bookmaker and see what the difference would be.
We decreased all the fees with the 10% and keep the sum, as well as the theoretical distribution of the bets. The table would look like:
We realize that whatever the outcome, the payout would be $90 and the bookmaker would keep to himself $10 from the collection of $100. In this specific case, the margin is 10%, but in practice may vary.
There are several factors that influence the amount of the margin. The basic ones are the type of sport and the specific league. The margin for the popular sport events played by the big leagues could be reduced by up to 3 – 4%. However, the probability of a victory of a team/participant cannot be specified with certainty for some sports. In such cases, the margin can reach up to 15 – 20%.
Another factor for the amount of the margin is whether the prediction is one of the major or additional to the outcome of the event. It is difficult to give an accurate prediction of some of the additional results. In order to ensure himself against a possible error of the betting house may increase the margin of these results.
The number of different outcomes of an event is of great importance to the margin. If there were a lot of options, the imbalance of the distribution of the bets would be greater. When, in practice, the distribution deviates from the theoretically more balanced, and that we have described in the above examples, then the risk of the house of bets is greater. All of which leads to a higher percentage margin.
The American sports are usually presented with a line with two results that includes disability. The disability is such that it would equalize the chances of the teams.
The properly chosen handicap also divide players into equal groups of supporters of the favorite and the underdog. This situation presents an opportunity for the broker to use a lower margin when he presents the lines in place of a margin was to be used to the football lines with three results. The odds of the two results are generally equal to 1.91/ 1.91. This could also look like this – 1.909/ 1.909, if the betting house rounds the odds to 3 places after the decimal point. The quantity is such, since it is based on the amount of 110 that is used in the American system of presenting the odds.
Since we already know how the bookmaker’s margin is calculated, let’s see exactly how much it is for a line with 2 of the outcomes and odds of 1.91/ 1.91. Suppose that the distribution of the $100 bet is equal to – $50 for each outcome. The bookmaker pays the winners of 50 x 1.91 = $95.50, kept at 4.50 % for the same, which is 4.50 % of the profits. This margin is standard.
As with other businesses, the bookies also compete for customers. What is more, the methods for the analysis of the information and the predictions of the results of the events that are produced.
The effect of these two factors has led to the appearance of lines, even with the reduction of the margins are called reduced margins. Some of the companies, such as Summit, have offered lines with two outcomes for American sports with odds of 1.95/ 1.95.
The use of Asian handicap for football has led to some Asian bookmakers such as SBOBET, 188bet, etc., to offer even more favorable to the gamblers for the lines with 2 results. The odds offered are, for example, 1.96/ 1.96.
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