The world of bookmakers is a near-mystical one, full of closely guarded secrets, formulas passed down from master to apprentice, and calculations unknown to mere mortals. If this sounds dramatic, well, that’s because we strive to be entertaining – but at the same time, there’s a basis in reality for this kind of talk. Bookmakers across the decades (centuries, to be honest) have kept their methods, formulas and calculations secret, making it difficult for bettors to know what the ‘true’ odds of any sporting event are. The question is, does it matter? And he answer is, of course, both yes and no. Let’s take a closer look.
It isn’t possible to place sports bets without the help of an intermediary who determines the odds on any sporting event. There has to be a formula to calculate winnings, after all, and it isn’t as simple as, for example, roulette, which has set payout rules. Bookmakers are those mythical combinations of accountants and fortune tellers who determine the odds. In our guide, How to read sports odds, we cover the different types of odds and how to use them to figure out how to bet and what your winnings would be. How those odds are calculated, however, is a near-secret known only to the bookmakers.
Using a complex combination of historical data, current performance, and predictive outcomes, bookmakers calculate the probability of certain outcomes in each game, race or event. They then translate this probability into percentages, decimals, or other forms of odds.
There are many factors considered when determining odds, and they vary widely between different types of sports. Team sports, for instance, would consider both team performance and individual player performance, as well as game-day team composition, plus hundreds of other factors that could include anything from whether it’s a home or away game to injury rates and possibly even weather predictions. They will even take into account what other bookmakers are saying about an event.
Over the many centuries that some form of sports betting and, therefore, bookmakers, have existed, many factors have come into play. There are plenty of old-school bookmakers who will tell you today that, no matter how good the computer-based algorithms get, there’s no substitute for gut feel and that, yes, they do take that into account when working out probabilities.
However, these probabilities aren’t exactly what the bettor will see.
Everyone has to earn a living, and bookmakers and sports betting facilitators are no different. The formulas used by bookmakers will always include one additional factor: the vig, aka, the juice. This is akin to a commission, the little bit of cream off the top that they take in compensation for all the complex calculating.
The word bookmaker is actually increasingly a misnomer these days. With the absolute explosion in online sports betting over the last couple of decades, many operators have, unsurprisingly, turned to the computing power of algorithmic calculation. There are extremely sophisticated background operations running all of your favourite sports betting websites, continually calculating the odds using complex formulas that are just as closely guarded secrets as the old-school bookmaker’s gut feel.
But does that mean your corner bookie is a thing of the past? We don’t think so! Real life bookmakers still exist and range in methodology from classic blackboard and chalk, to those who develop their own apps and run their own sports betting websites using their vast knowledge (and their infamous guts) to inform how the AI is developed.
Trust and consistency are the two most important factors that you, as a sports bettor, should consider. Whether you’re choosing a flesh-and-blood bookmaker, or selecting an online operator, take a close look into their history. Make sure they are consistent, verified and trustworthy. Check online operators for certifications to ensure they are legal and legitimate. Illegal operators are everywhere, and while their offerings may seem attractive, they are more likely to disappear with your money. By choosing legal operators, you know that you are getting accurate odds, reliable information and a decent chance at a payout.
Check out the other articles in our Sport Betting 101 series to get deeper into the world of sports betting.
