Secrets of sports betting – The secrets of bookmakers!

During the 1980s, I was part of a group that used computers to win millions on sports bets in Las Vegas casinos. This was before personal computers were in everyday use. The invention we don’t call the Internet was years away from having access to statistics and disability data. We were successful for two reasons. First, we get ahead of the odds makers in gathering important information. They were still doing things the old-fashioned way, and we took advantage of that loophole.

Those days are gone forever. The second key to success is understanding how the numbers really work.

ODDS DO NOT PREDICT THE WINNER
Think of it this way. “The odds don’t predict who will win. They actually predict who the public THINK will win.” Most sports bettors, both professional and novice, do not understand the secrets of bookmakers.

Two-way sports bets (ie two teams with a 50-50 chance of winning with no draw) are posted at odds of 11-10. This means that you bet €11 to win €10. Half of the punters select team A and collect their £10 when they win. The other bettors choose team B and lose the contest by paying their bookmaker £11. You might think that this gives the house or bookmaker a 4.55% edge. You would be wrong with this assumption, but don’t feel bad, 99.5% of punters think like you.

THE BIG MISTAKE
The general thought is something like this. Bookmakers ensure a profit only by balancing their books. In other words, they expect to get half of the bets on each of the teams, so they always win. In reality, they hardly ever balance their books, or even come close. You may find small local bookmakers, with small funds, trying to operate this way, but with so many internet shops available, even they can match unbalanced books. Many small bookmakers don’t even know the secret. They are like the rest of the cattle and travel together with the herd. The misconception that the big sportsbooks need to balance their bets is the big secret of the industry. What they do need to achieve is ensure lots of volume on both sides, without really balancing the books.

THE BOOKS BOOKS SECRET REVEALED
Suppose the bettors in our example game risked $165,000 to win $150,000 on the favorite. But the public only bet $82,500 on the underdog trying to win $75,000. This looks like a mismatch, with the bookmaker heading for big trouble if the favorite wins. If the dog prevails, the bookmaker makes a profit of $90,000. Win $165,000 from favorite bettors and pay $75,000 to Dog winners. If the Favorite wins, the bookmaker loses $67,500. He’ll win $82,500 from underdog backers, but lose $150,000 to fans betting on the favorite. This results in a loss of $67,500.

Now you too may be saying that math doesn’t make the house a winner. So let’s review, when the Underdog wins, the bookmaker wins $82,500 but if the favorite wins, he loses $67,500. Favorites and underdogs generally split the winnings equally with each side winning 50% of the time. Half the time you will lose $67,500, the other half you will win $82,500, so your profit is $15,000 no matter who wins. So, in our example, what is the bookmaker actually risking? The bookmaker is actually risking $67,500 to win $82,500. In simple terms, he is essentially betting $75 to win $100. That means he doesn’t have to win even 50% of the time to break even. The house only needs a 42.9% strike rate, after that it’s all profit.

MAKE A 33% PROFIT NO MATTER WHO WIN
Give me the odds of losing $75 and winning $100 on a 50-50 coin bet. I’ll beat you every time with this big house edge. For most fans, the general thought is that the bookmaker needs to balance his books with even bets. From my example, you can see that this is not true. When you have punters risking twice as much on the favorite side, you get a 33% return on every dollar.