There’s a fairly easy reason why bookies almost always prosper inside the long-term. What it all amounts to may be the thought of “value”.
We are very mindful what “value” means being a basic word. However in the sports betting world it has a particular meaning most of its very own.
The bookie comes with a price on the particular event. Let us consider soccer at the moment, and suppose with regard to argument that Wolverhampton Wanderers are playing a Premier League fixture against Manchester United at United’s home ground at Old Trafford. The bookmaker will give you a cost of 8/1 (or 9.00 if you are using decimal odds) for Wolverhampton to overpower United.
But the bookmaker doesn’t really feel that Wolves come with an 8/1 chance of winning the sport. Possibly he might consider these to be 10/1 outsiders. However by offering 8/1 on the customer he retains what he calls the home edge, which effectively is his charge when planning on taking the bet.
Of course, if Wolves do win the match the bookie is still losing on any particular one bet, but he’ll almost certainly have designed a profit from the fixture overall. The reason for that is that the bookmaker can have built up what he calls a “balanced book”. He will, quite simply, have taken enough money from bettors backing a Manchester United victory or even a drawn match to pay people that had backed Wolverhampton Wanderers.
What’s more, while he hasn’t offered the genuine price – remember he’s got given 8/1 rather than the more realistic expense of 10/1 – he can retain a mark-up through the fixture. After all, the costs he can have given on a Manchester United victory or a draw will have been stingy too.
This will be the theory no matter the reason. And in practice, too, the bookmaker almost always wins because the book more often than not balances. There are though exceptions, and freak events for example Frankie Dettori’s legendary seven-race win at Ascot can hit the bookies hard plus some extreme cases can distribute them of business.
But even if handling a balanced book it will be possible to beat the bookmaker within the long-term. This is for the reason that bookmaker’s estimation from the likelihood of any particular outcome could be erroneous. To follow through with our own example, it might be that this real likelihood of Wolves defeating Man United are in reality 6/1. Possibly the linemaker, just starting out on the sports betting industry or inexpert in matters regarding English football, has not yet considered injuries, or the proximity of a major European match for this particular fixture.
When this happens what we have is known as value bet. The price were given actually errs along the side of generosity, and it is the truth is superior to the “real” price.
In this instance the scenario is reversed. Wolverhampton still can, and probably will, lose the match. But the punter who places only value bets will a duration of time make a certain profit. Thus the expert gambler applies statistical analysis to what is at first glance of computer a “science of chance” and turns it into an assured source of income.
But there’s another, more certain means of turning the generous price right into a guaranteed profit. By taking advantage than it and either laying it on the true price using a betting exchange or by putting a wager on the opposite side or sides with the line with another bookmaker, it is possible to lock-in a guaranteed mark-up on the overall deal.
We know this as an arbitrage (known as a possible under round or perhaps an over broke), where there are thousands of punters around the world who make regular profits staking on just sports arbitrage bets.
So whilst it is usually true the bookmaker wins through inside the end, you’ll find indeed some very real exceptions.