You might have wondered why bookmakers are very successful at what they do. Well, back in the day, sports betting existed without bookmakers. This works when people would bet on sports events and wager against other individuals. Thus, bettors would agree on the terms of the wager between themselves, and when the event was over they would settle up. Most of the time, this process still worked well until today, despite the possibility of occasional disputes.
This type of activity is still popular among people nowadays, as they take sports wagers with colleagues, family members or friends. However, they do this more formally via a recognized bookmaker. In fact, this has been used for hundreds of years already, and there are still no signs of changes any time soon.
The role of the first bookmakers and of those who exist today are not too different. The only change being seen in the game was the influence of the Internet. In fact, many bookmakers operate online, where customers can place wagers without any manual interactions.
Setting The Odds And Lines
Most firms engaged in bookmaking would hire a team to compile the odds. They are called odd compilers who set the odds and lines. Although they use advanced software, they still have to know more about the sports they are covering.
In fact, it would be of great help if they are mathematically inclined. Here are several factors how odd compilers price their opening odds and lines.
- Odds and lines of competitors – There are many habits of people that have changed in the advent of online betting. Modern day bettors are a bit more prices sensitive compared to those back in the day.
This is because more and more bettors are learning to compare the bookmakers and their lines, and websites like betenemy.com are fully aware of this. Therefore, they have found out that it would be beneficial if they provide competitive odds.
- Likely betting activity – Odd compilers will likely have a clear idea about which their customers would bet on a given market. So in order to maximize their potential profit and reduce risks, they would factor this into their own odds and lines.
- Their own outlook – It is the initiative of odd compilers to take their own opinions very seriously on what is likely to happen, since they are very knowledgeable. For instance, their outlook typically forms the starting point for the odds and lines being set by them.
Therefore, they will look at all possible outcomes and determine the probability of every result. Once they have made initial judgments of the possible outcomes, they have to factor in their profit margin.
- Profit margin – The most probable reason why it is so hard to make money from sports betting is that bookmakers build profit margins into the odds and lines of their own.
Thus, in order to gain from the profit margin, a bookmaker needs to have a balanced book. It is when they are liable to pay out roughly the same amount no matter the outcome. This means that they are guaranteed to make a profit regardless of the event’s outcome.
Why A Bookmaker Adjusts Odds And Lines
It is the job of the odd compiler to almost always make adjustments to the odds and lines. This happens between the time they released them and when the relevant event starts. There are a couple of reasons for making adjustments.
- Change in outlook – In order to ensure that their views are as accurate as possible, odd compilers take a huge range of factors into consideration when thinking about the outlook. Nevertheless, there are more changes to happen before the event happens. So it is not strange to see their outlook change entirely.
- Weight of money – It is the best interest of the bookmakers to have balanced books. This means that for each market that they price up, they will attempt to create a situation. This is where they stand to pay out the same amount of money no matter the outcome.
That is the reason why they take the betting activity of their customers very seriously. They attempt to predict the action that they see and they will then be able to set the odds and lines in a way that would lead into the balanced book.
However, this is not always the case for sports bettors because they are not that predictable. Thus, bookmakers can have some problems along the way because the actions would be different from what is expected. This is when the odd compiler comes in because they make adjustments on the basis of the weight of money coming in, and try to rebalance things.