In this article, we look at how sports betting work, more specifically how the bookmakers make money and what you as a sports bettor (or sports trader) can do to avoid being amongst the 98% or so who lose more than you make.
In traditional sports betting the bets are being offered by a bookmaker. The bookmaker decides what markets they want to offer, what the odds are and how much money they’re willing to accept from you on the bet. It’s then for you as a bettor to decide if you think the odds on the bet you want to make provide value and is a bet worth taking.
Since there is no subscription fee to the bookmaker and it doesn’t carry advertising on the site, all its revenue comes from the bets the bettors make. So, the money lies in the odds they provide.
What this means is that the odds do not represent the real value or probability of the outcome. If the odds are set “true”, then the probability and the odds must be 100% correlated since they are in essence the same thing: Odds = 1/Probability, so if you have a probability of an outcome that is 10%, the odds should be 1/10% = 10. Likewise, if the probability of a certain outcome (such as a coin flip) is 50%, then the “true odds” should be 1/50% = 2.
A bookmaker does not provide these “true odds”. The easiest way to look at this is to look at an event where there are only two possible outcomes. So, for instance, let’s look at a tennis match and let’s use the match odds market.
In the ATP Cup match on January 2nd, 2020 between David Goffin and Radu Albot, Goffin was the clear favorite.
At Bet365 the odds were:
Goffin to win: 1.36
Albot to win: 3.00
If we now “translate” these odds to probabilities, we get the following:
Probability for Goffin to win: 1/1.36 = 73.53%
Probability for Albot to win: 1/3.00 = 33.33%
If we then add these probabilities, we get 106.86% in total. You’ll notice that the total probability is above 100%, which is obviously not realistic; The probability can only be 100%. The difference between the calculated probability, as offered by the bookmaker, and 100% is called “the overround”, and this is where the bookmaker creates value for itself and makes money. If the money by the bettors is evenly spread between the two players, the bookmaker wins 6.86% no matter which outcome. If the bettors begin to spend a lot of money backing one of the players, for instance, if they suddenly start to back Albot, the bookmaker will now begin to change the odds so that the odds for Albot to win will decrease and the odds for Goffin to win will increase. This is done in order to decrease the interest of the bettors to keep backing Albot and shift the momentum towards Goffin in an attempt to “balance the books”. Bookmakers do not like risks or uncertainty. Unlike most of the bettors, they are NOT in it to gamble, they are in it to win it and they want to know that the risk of loss is minimized every time.
Now, unfortunately for the bookmakers, they can’t always direct the bettors to spend exactly 50/50 on the two possible outcomes every time, so they will lose money on some bets/markets occasionally. Favorites are typically backed more than outsiders, quite simply because they win more, and most punters (bettors) like to win (of course). You will sometimes hear or read that the bookmakers lost a lot of money on a certain event where the favorite won. In order to offset that, the odds on favorites are typically lower than it probably should be, looking at the “real” probability of the favorite to win. This is done both in order to make the bet being less attractive, so the bettors won’t continue to back it, as well as, of course, minimizing the loss should the favorite win.
The bookmakers also are VERY aware of how each of their customers is placing their bets. If they feel that the bettor is particularly good at finding odds that are too high vs what they really should be (for instance, if they always back selections where the odds offered were higher than on other bookmakers), then the bookmakers are very quick to limit the stakes the bettor can place on individual bets. In some cases, bettors can effectively lose any option to place a real bet at the bookmaker. In other words, the bookmakers will effectively shut bettors down whom they believe will lose them money in the long run.
Given the way the bookmaker sets the odds and how they look at bettors who actually make money, it’s obviously not an easy task for a bettor to be profitable long term. If you as a bettor want to “stay in the game” for a long time, preferably with some profits to show, then obviously you need to be clever.
First of all, you need to be good at spotting value. By that we do not mean that you should be good at finding odds which are particularly high at a given bookmaker vs the others – this is the sure way to be limited/restricted by the bookmaker. No, what we mean is: Find markets where the industry is wrong, i.e. where you believe an underdog should really not be an underdog or not to the extent, the general odds suggest (just as an example). The problem with this approach is that the bookmakers have A LOT of statistics available and a lot of people working on it, so spotting wrong industry odds is a lot easier said than done. For the same reason, it is often said that you will not be able to make money long term betting on markets like, say match odds (1X2) on Premier League football matches. These markets are gigantic and the bookmakers know pretty much everything that is worth knowing about the teams and the matches. It is virtually impossible to have “an edge” on these markets. This applies to most markets of this size.
So is it impossible to make money as a bettor then?
Luckily, no, and the following is some of the best sports betting advice we can give.
First of all, it’s more likely that you need to look at the less liquid markets or leagues as these are less exposed and of lesser interest to both bettors and bookmakers.
It’s also important to look at the odds you can get. Certain bookmakers use a higher overround than others (so their odds are generally lower than other bookmakers). Make sure to get the best odds you can, but don’t always use the same bookmakers if you have several to choose from (which you should have).
And this is another advice: Make sure to have accounts at multiple bookmakers, don’t just always use the same. One added benefit of opening several accounts is that you typically get a bonus for opening an account. Make sure to get the most out of this. This particular “area” is actually a discipline in itself called “Matched Betting” – google this term and you will find numerous systems developed for getting the most out of campaign offers, opening account offers, etc.
If you have the time there is also a lot of software available which you can get hold of (at very different price ranges) – using this you can backtest and develop your own betting systems or systems for sports trading on Betfair or other exchanges (if you think, “What is sports trading?”, read this article; https://serioussportstrader.com/sports-trading-the-pros-and-cons-vs-sports-betting/). Hereby you can find selections to back and depending on how you have set up the system, you can define what the “true odds” should be in order to be able to find a value bet (i.e. a bet where the odds offered by the bookmaker are higher than what you find the “true odds” to be).
Finally, there are a lot of sports bet experts providing their tips online. Most are not making money, unfortunately, and there are a lot of scammers who sell their “expert tips” for a monthly fee, where the tips are incredibly bad and losing money day in, day out. The only reason for these particular tipster services to existing is for them to get subscription money from you plus your email address so they can make money via affiliate marketing (and “selling” your email to others who will then try to sell something to you). Luckily, they are not all bad. The best way to find a good tipster is via some of the tipster review sites. We recommend the following for being serious and pretty reliable:
- Honest Betting Reviews – https://www.honestbettingreviews.com/
- Lay Back & Get Rich – https://www.laybackandgetrich.com/
- The Smart Betting Club – https://smartbettingclub.com
- Cash Master – https://www.cash-master.com/
- GeeGeez – https://www.geegeez.co.uk/horse-racing-systems/
- Goal Profits Review – https://review.goalprofits.com/
- MakeMoneyForum – https://makemoneyforum.co.uk/
- Best Betting Review – https://bestbettingreview.co.uk/
- Betting Rant – http://www.bettingrant.co.uk/
Some comments here on a few of the above services:
Apart from The Smart Betting Club, all the above are free to use. The Smart Betting Club delivers the most extensive reviews of tipster services and also publishes some online magazines a number of times throughout the year, plus they have some free exclusive tipster service for their subscribers.
A couple of them are actually primarily known for other services, where the review site is a minor service vs the main service they provide:
GeeGeez is primarily a (paid) horse racing software service where you can create systems for horse racing (UK and Ireland) while Goal Profits is primarily a (paid) football (i.e. Soccer) trading service where you have access to software that can help you trade the football markets.
Betting Rant is a service that also has a couple of their own tipsters on board.
If you want to create your own betting system or if you want to follow a tipster, we suggest you read these articles before you move on if you haven’t already done so:
Here, you will find some essential advice on what to look out for when searching for a good tipster or creating your own betting system.