Bookmaking requires some higher-level mathematics. Sportsbooks use sophisticated data feeds to collect and analyze statistics, but that’s just the beginning. This article will cover how operators can offer punters tempting odds while protecting their bottom line, as well as a round-up of different odds systems and popular bets.
Punters and bookmakers alike analyze a raft of statistics when building their betting strategies.
They look at a team, player, or horse’s performance history down to the last detail. For football matches, they’ll look at how the two teams fare against each other; for tennis, they’ll research whether a player prefers grass or clay. For horse racing, they might look at the horse’s age or how much it seems to like a particular track. And they can also include insider information or leaks, such as an unreported ankle twist or a jockey’s new diet.
Some of the most relevant stats for football are:
- Shots per game
- Discipline (yellow cards, red cards)
- Possession % (amount of time team has control of the ball)
- Pass % (successful passes)
- Aerials won
Each sport has its own extensive field of statistics — and the more statistics there are, the more data there is to analyze. Bookmakers and players will come to their own conclusions when breaking down the available data.
What systems of odds do players expect?
There are three main systems that bookmakers use to set odds: fractional, decimal, and American. Fractional odds are favored in Ireland and the UK, American odds are used in the US, and decimal odds are used in Europe and most of the rest of the world. To break down the different systems, we’ll look at how the same bet on the same event pays out through each one, as well as a calculation of implied probability, which we’ll cover in more detail later.
We’ll take the example of a bookmaker offering 5/2 odds on a team to win.
- Example odds: 5/2
- Payout = stake x odds + stake
- $100 x 5/2 + $100 = $350
- Implied probability: 2 / (2+5) * 100 = 28.6%
- Example odds: 3.5
- Payout = stake x decimal odds
- $100 x 3.5 = $350
- Implied probability: (1 / 3.5) * 100 = 28.6%
- Underdog: positive odds, amount of money punter wins for every $100 staked
- Favorite: negative odds, amount punter needs to bet to win $100
- Example odds (Underdog): -250
- Payout: 250 + $100 = $350
- Implied probability: 100 / (250 + 100) * 100 = 28.6%
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Implied probability and overround
Bookmakers don’t just calculate the likelihood of an outcome and offer their own forecast. They need to skew the odds in their own favor. If they didn’t, they would simply be an exchange window where the losers handed money to the winners.
After calculating the odds, bookmakers will add in what’s called an overround (also called the juice, the vigorish, or the vig). Factoring in this extra margin means that no matter what the outcome is, the bookmaker comes out on top. The bookkeeper will then massage the odds to make them more interesting for punters. This typically means increasing the house edge on the favorite and decreasing it on the underdog, incentivizing punters towards the riskier bet.
A simple example can illustrate the idea.
It’s common for sportsbooks to offer bets on the coin flip that determines the kickoff in NFL games. With only two possible outcomes, the probability of either heads or tails are both 50% — or 1/1 in the fractional system, 2.0 in the decimal system, -100 in the American system. But instead of offering 1/1 on both heads and tails, the bookmaker might offer 5/6 (1.83, -120) for an implied probability of 54.5% on each outcome. The total probability is then 109%, with the extra 9% serving to cover the bookmaker’s bottom line.
A football game could provide a more involved example. Taking history and expert opinion into account, as well as how the two teams are performing that season, a bookmaker might set the odds for the match at 3/1 (4.00 in the decimal system) for Tottenham to win (25% probability), 4/6 (1.67) for Chelsea to win (60%), and 17/3 (6.67) for a draw (15%). The total probability is 100% (with negligible rounding).
With the same example, the bookmaker might decide to work in a 9.2% overround. In that case, the odds offered would be 7/2 (4.5 in the decimal system) for the home team to win (22.2% probability), 5/11 (1.45) for the away team to win (68.8%), and 9/2 (5.5) for a draw (18.2%). In this case, the total probability would be 109.2%. That extra 9.2% is essentially the bookmaker’s commission for offering the betting service. The odds are against the underdog are artificially lengthened to offer punters a bigger payout on the less likely outcome, and vice versa for those on the favorite. This incentivizes punters to bet in a way that protects the bookmaker’s profits.
By using each decimal odd as a denominator of a fraction and 100 as the numerator and totaling the results, players can easily calculate the overround. In our previous example, punters can see that the juice is 9.2%:
(100/4.5) + (100/1.45) + (100/5.5) = 109.2%
Punters love running the odds and pitting their gut instinct against the bookie’s line. Seasoned sports bettors have a sharp mind for numbers and will calculate the value of any bet before laying their money down. If the juice is too high, punter’s money will stay in their wallets — and, obviously, if it’s too low, the bookmaker will go out of business. The trick is to hit the sweet spot.
Here are the equations punters use to calculate implied probability:
- Decimal odds: (100 / decimal odds) = implied probability
- Fractional odds: denominator / (denominator + numerator) * 100 = implied probability
- American odds: 100 / (positive American odds + 100) * 100 = implied probability
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Different kinds of bets
Punters have nearly infinite choices for how they want to lay down their cash. Here are some of the most common types of bets.
Win bet (Moneyline)
The win bet is the simplest wager in the world of sports betting. The punter chooses which team he or she thinks will win in a head-to-head contest. If the team wins, the bettor wins, and vice versa. Win bets are the easiest example of how bookmakers can balance their books. If Chelsea is favored to win against Tottenham in a Premier League match, you might see this in an online sportsbook:
If the punter bets €10 on Chelsea and his team wins, he walks away with €15. The odds are against Tottenham both because a Tottenham victory is a less likely outcome and because the bookmaker wants to encourage punters to bet on the team, so if a punter bets on Tottenham and the team wins, the punter gets €75. Betting on a draw yields €35.
Point spreads (Handicaps)
Spread betting is where things get a little more complicated. Spread betting is similar to the win bet, but with a slight twist that levels the playing field. Instead of simply having to win, the favorite has to win by a certain margin. In the American odds system, the spread is represented by a +/-. For example, if the Tampa Bay Buccaneers are expected to beat the Kansas City Chiefs, punters might see this in a sportsbook:
For a punter to win a spread bet on Kansas City, the team would have to win by at least 8 points (spreads often include a 0.5 to avoid draws).
Total bets (Over/unders)
Over/unders, also known as totals, looks at the combined score of the event. Instead of offering odds on a team to win, bookmakers estimate the total score. This might appear in a sportsbook like this:
Here, the bookmaker offers 6/5 odds that the combined score will be four or higher and 7/10 odds that it will be three or less.
Prop bets (Specials)
Proposition or “Prop” bets, also known as specials, aren’t related to the outcome of the game. Punters bet on singular events during the game or even the entire season. They can wager on a single player’s performance, among other statistics, or even whether a player is injured or argues with a referee. Sportsbooks all offer their own prop bets, but the most common include which team will score the first goal and whether a star player will score.
A prop bet in a sportsbook might look like this:
|Prop: Ibrahimovic total goals in the Champions League Finals: 2.5
||Over 2.5: (-120)
|Under 2.5: (-105)
When betting on futures, players pick the eventual winner of a contest long before it even begins. One option is that bettors can lay a bet that a certain team will win a given championship. For example, a rugby fan might wager that Scotland will win the Six Nations Championship. Betting will start before the tournament begins, and odds will be adjusted throughout.
Parlay betting is where punters bet on the result of multiple events. The punter makes a series of predictions and must be correct on all of them in order to win the bet. Parlays are, by nature, harder to win, and so come with bigger payouts. In a parlay bet, punters can combine multiple different kinds of wagers, such as a win bet in one fixture and an over/under in another.
Progressive parlays and full cover bets
Similar to parlay betting, progressive parlays include a range of selections. However, with progressive parlays, the bettor can be wrong about a certain number of events and still win the bet. Full cover bets are similar to parlays.
Available betting types expand exponentially when punters set their sights on multiple events. Instead of making two separate bets on different races, punters can lay a double bet — that horse A wins the first race and horse B wins the second. Things get dicier when it comes to the Trixie, most often used in horserace betting. In a Trixie, the punter lays three double bets and a treble bet, needing at least two winning selections for a return. Other full cover bets include:
- Yankee: six doubles, four trebles, and a fourfold accumulator
- Super Yankee: 10 doubles, 10 trebles, five fourfolds, and a fivefold accumulator
- Heinz: 15 doubles, 20 trebles, 15 fourfolds, six fivefolds, and a sixfold accumulator
- Super Heinz: 21 doubles, 35 trebles, 35 fourfolds, 21 fivefolds, seven sixfolds, and a sevenfold accumulator
- Goliath: 28 doubles, 56 trebles, 70 fourfolds, 56 fivefolds, 28 sixfolds, eight sevenfolds, and an eightfold accumulator.
- Lucky 15: four singles, six doubles, four trebles, and a fourfold bet.
- Lucky 31: five singles, 10 doubles, 10 trebles, five fourfolds, and a fivefold accumulator
- Lucky 63: six singles, 15 doubles, 20 trebles, 15 fourfolds, six fivefolds, and a sixfold accumulator.
Full cover bets like Goliaths and Lucky 63s seem overly intricate, but the truth is that punters love them — especially dedicated horserace bettors.
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Sports betting data feeds
You can’t offer compelling bets without oceans of data to analyze. Most online sportsbook operators cooperate with a data feed provider to offer accurate, up-to-the-minute stats — doubly important if they offer in-game betting.
Teams, clubs, and leagues often make their own records publicly available, and both punters and bookmakers alike are welcome to consult them. Team and league data is often considered to be official, but with that legitimacy comes a few downsides — principally, the lag time. Official records are slower than unofficial ones, emphasizing accuracy and verification over speed.
The sheer volumes of available data demand the kind of calculating power that only algorithms can provide. To create a base of loyal bettors, sportsbooks need to offer an extensive catalog of sports, events, leagues, tournaments, and championships, all tailored to their target market.
But only the biggest bookmakers can afford to develop proprietary algorithms to collect and analyze data. Most sportsbooks turn to specialized providers like Geniussports and BetRadar, both of which provide them with constant, up-to-the-minute data from sports events around the world.
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Slotegrator’s Sportegrator solution offers a range of sports to make sure that online sportsbooks can provide their punters with their favorite sports to bet on, whether it’s football, rugby, cricket, or table tennis. The odds are powered by industry-leading data providers, meaning you and your players will always have access to the latest stats. Sportegrator also generates all the odds, saving operators the time of calculating them or the cost of hiring a team of mathematicians. You can start an online sportsbook by integrating Sportegrator through a single session with our API.
Get in touch to learn more about how you can open an online sportsbook.