How sports betting is calculated

Odds, or bookmaker quotes, is the main term in sports betting that reflects the likelihood of a particular event. The bookmaker’s profit depends on the correct formation of the odds in order to stay in the black for any outcome of the match.

The principle of creating a coefficient

The main task of the bookmaker is to always make a profit. The bookmaker’s analysts calculate quotes for the event as a whole and for individual outcomes, based on the real probability and pledging a margin that provides the bookmaker with income.

Let’s use the coin example to get the point. The probability of each side falling out is 50%. Let’s say you bet $ 100. That is, on “tails”, and your friend the same amount on “heads”. With no margin, the winner will receive CU200. That is, that is, the coefficient is 2.0. In such conditions, not a single office can exist, therefore quotes are obtained not 2.0-2.0, but 1.95-1.95, depending on the margin value. And now, if you win, you will be paid $ 195. e., and the remaining 5 cu. That is, they will go to the office treasury.

How is the coefficient formed?

The coefficient shows the probability of the outcome according to the bookmaker’s analysts. Ideally, the probability is one or 100%. It is calculated using the formula k = 1 / p, where k is the coefficient and p is the probability (from 0 to 1). For example, if the odds of an even score in basketball are 50%, then the formula will display the value as 0.5.

An analyst or a special department of a bookmaker thoroughly examines the event, analyzes statistics, applies the theory of probability, listens to the opinion of experts and, based on all the information, decides that the first team will win. When forming quotes, specialists are based on real chances of an outcome. This is how an objective assessment of the probability of the outcome of the fight would look like (without the bookmaker’s margin):

  • Team 1 wins – 70.2%;
  • draw – 15.3%;
  • victory for team 2 – 14.5%.

The sum of real probabilities is 100%. In this case, the majority will bet on the winning of the first team, therefore the office is insured and artificially lowers the quotes for the outcome of P1, increasing the sum of the probabilities for the event. After such manipulations, the following is obtained:

  • odds on P1 – 1.54 (probability 64.8%);
  • coefficient on X – 4.22 (probability 23.7%);
  • coefficient on P2 – 5.4 (probability 18.5).

The sum of the probabilities for this market is 107%. Divide 100 by the odds to calculate your margin. Do this with all the quotes for the outcome (for each team to win and draw, for total over and under, etc.). Add up your results and subtract 100.