Many newcomers try to understand how bookmakers calculate odds. Why do they offer 1.15 and not 1.50 for a Barcelona win? In this article, we will explain in detail who puts out the odds, what they depend on, and why they can change every minute.
Bookmakers calculate odds in several stages:
- receive analyst reports;
- they set the margins;
- they compare the odds with the competition;
- monitor changes in the balance of power;
- they equalize the load.
It all starts far beyond the BK - at international analytical agencies. Specialists estimate the probability of each outcome, focusing on many factors:
- statistics of face-to-face meetings;
- performance in the season, etc.
At this stage, the bookmaker does not get odds, but probability as a percentage. For example, in the match between Barcelona and Real Madrid, the chance of the Catalans to win is 43%, to draw - 20%, to lose - 37%. This is just the tip of the iceberg - further bookmakers work with numbers.
What is the margin of bookmakers
The term itself came from the financial sphere. Margin is the difference between the price and the cost of production. In other words, it is the profit. Bookmakers always take margin into account when forming a line.
Betting houses translate the percentages received from analysts into quotes using formulas. A lot of free calculators can be found on the Internet, which easily transform quotes into percentages.
Once they know the real numbers, bookmakers put in a margin - the percentage that they will earn at any outcome. Margin is usually between 2% and 20%.
The Equal Money Market
Let's not go into mathematical calculations, but give a trivial example. Some bookmakers take bets on equal odds markets (which team touches the ball first, throws out, etc.). The probability of such an outcome is 50/50 (odds 2.0).
In the bookmaker's line the player will not find such quotations. The maximum odds that the bookmaker offers in the equal odds market is 1.95. But this is a big rarity. Usually, the odds for such outcomes are 1.85. This means that the bookmaker in the first case laid 5% margin, and in the second - 15%.
Why each bookmaker has different margins
Any bookmaker uses margin. This allows the bookmaker to make regular profits. Its size is affected by three factors.
The number of players. Top bookmakers, who have a solid customer base and millions in sales, do not lay a huge margin. They have a small but stable percentage of a large number of bets.
Popularity of the event. Bookmakers always give bigger margins for exotic leagues or sports. In such a way betting companies try to protect themselves from professional players, who are well versed in these competitions. For popular events, the margins are often ridiculous. That attracts more customers. The book earns on such markets at the expense of huge cash flows.
The institution's policy. Some bookmakers count on the ignorance of newcomers, that is why they set dragon margins. Such lines are found in little-known betting companies that can't boast a large number of customers.