With the rise of pay per head companies in the last decade, it is not unusual for online sportsbook owners to not be privy to the secrets of how do bookies set odds. Most owners rely on the expertise of the oddsmaker and line managers of the PPH service they subscribe to, which is the right thing to do, let the experts do what they do best.
The Art of Odds Making
Although it is not essential for sportsbook owners to understand the process, most are curious, and at one point or another, I guarantee they have asked themselves or had someone ask them, how do bookies set odds?
And truth be told for any bookie agent who really wished to be successful in this industry, understanding how things are done is crucial. After all, how can you make sure, your betting odds are as competitive as can be if you can’t differentiate a loose line from a sharp one?
This article is intended for those bookie agents who are just starting on their path, but even those who have a few seasons under their belts might find it entertaining and maybe even enlightening.
Why are Sharp Betting Lines So Important?
Let’s start with the basics, a sharp betting line is one that has been designed to minimize the risk of a wise guy taking you to the cleaners.
Sharp pay per heads like www.AcePerHead.com, don’t wait for Vegas or other large sportsbooks to come out with a betting line for a game. Instead, they post their own lines based on the needs of their clients, but, they take special care to post solid opening lines.
Opening lines are subject to a lot of fluctuation as the public starts placing their bets indicating which team they favor; this is especially true for odds on NFL which get posted several days prior to the event. If the opening lines are not carefully thought out, then independent bookies run the risk of being over-exposed or worse, they give sharp or wise players an advantage by creating value lines that these bettors can take advantage of.
Sharp players follow line movement to find value if they find an outlet that consistently posts loose lines they will take advantage of these lines as often as they can; the long-term effects of this is bookie agents run the risk of losing all their profits.
How Do Bookies Set Odds?
Odds Making is an art form, it takes skill, attention to detail, and passion. Successful booking consists of building margins into odds and then balancing the books, so no matter who wins the bookie agents always stand to make a profit.
Betting odds are not created to reflect the true probabilities of an outcome, they are designed to enhance the probabilities of making a profit regardless of the outcome. In this sense, setting the odds for a sporting event involves two different processes.
- Determining the True Odds of an Outcome
- Adjusting the Odds to Make a Profit
The real irony is oddsmakers don’t like to gamble while setting odds, although they may have their own preferences and some of this will influence how they set the betting lines, it would be frowned upon to choose one outcome over the other solely based on their personal feelings.
True professionals set prices in a way that reduces variances and ensures profits while still adhering to the real probabilities of an event occurring. In other words, a real professional will never deviate too much from the real probabilities of an outcome, if your current pay per head service sets lines that are way off from the lines posted everywhere else, you need to find another service immediately, they are putting your online sportsbook business at risk.
Determining True Odds
In order to determine what the true odds of an outcome are, the professionals in charge of setting the odds will look at many different things. Among these, we have, how the teams have been performing, the historical outcome of matches between the teams, various statistics including home win-loss records, and away win-loss records, individual player statistics, injury reports, and even the weather forecast is considered.
Clearly, expert opinions also become part of the equation, but, as we mentioned earlier, that opinion will never be the primary determining factor when setting betting odds.
Following substantial research and data analysis, the bookmakers are able to determine the what are the probabilities of a specific outcome happening. We will spare you the actual math as it is complicated and ultimately dull for those of us who don’t really need to use it.
Adjusting the Odds to Make Profit
Here comes the exciting part, once the oddsmakers have determined the likelihood of the outcome of a game, they proceed to add their margins to ensure profits.
In practice, how the odds are adjusted vary from one sportsbook to another and are frankly quite complicated. For obvious reasons we are unable to disclose the specific methods used by AcePerHead.com, but, we can safely say their methods have proven to be successful over the years as agents continue to report record profits year after year, even in those betting markets where profit margins are lower.
A critical factor in adjusting the odds lies in how players are likely to bet on a particular game. Analyzing player data, including their betting trends, helps the oddsmakers set their expected profit margins by adjusting the true odds down.
As an example, if the line managers know that one team is a definite crowd favorite, they will manipulate the odds to create interest on the opponent, this way they can balance the books and reduce the agent’s exposure on that match.
In some instances, oddsmakers have been known to create value on purpose to attract the interest of sharp players and level out the amount of money on each side. Now, there is something to consider, many less professional or experienced pay per head companies will create value lines by mistake, and while in some cases this might be turn out to be a positive, in the long run, such carelessness will cause more damage than good.
Top of the line pay per head services like AcePerHead.com will purposefully create these lines and control them in such a way that they give agents an advantage. This is the real mark of an excellent price per head company versus a mediocre one.
And that is in a broad sense the answer to the question how do bookies set odds? The next time you are asked this question, you can answer it like a pro.