Sports Betting

How Are Odds Decided In Pro Sports Betting?

How does a sports betting enthusiast decide on who to back? For example, let’s say that seemingly equally matched football teams are about to go head to head, with each as likely to win as the other. In this case the teams would have exactly equal odds, right? No, it is impossible that opposing teams ever have the exact odds in the world of sports betting. A team must be the favourite, and the other the underdog, by the very nature of the practice. It is the fact that a team is a favourite and the other the underdog that makes sports betting possible.

But why? Let’s take a closer look at odds, and get a better understanding of how sportsbooks decide to assign them.

What Do Odds Mean?

In practice odds are not only an indication of how much will be paid out, should a bet win, they also represent how likely the bet is to succeed. No matter how odds are displayed, American or British, the numbers mean the same thing. Let’s use the British fractional system and take the numbers 1/10.

This is a longshot bet, likely representing an underdog. Which is not to say that underdogs never win, of course, they happen to win far more frequently than is assumed. The point is that 1/10 is a fairly unlikely underdog. In this case a bet of $1 will pay out $11 in total if succeeding. That’s $10 profit plus the original amount staked.

In that same matchup the favourite team might have been given odds of 1/2. The same rules apply, meaning that a bet of $1 will return just $3 in total. The underdog bet is potentially very lucrative, while the favourite bet is extremely thin. To make any money on the favourite bet a huge amount must be staked; dramatically more than the underdog bet.

So why does this all matter?

Sportsbooks Are A Business

Even after assigning odds, and accepting bets, a sportsbooks may make adjustments. The simple fact is that sportsbooks intend on making money, and if no one is betting on one option or the other, the situation must be changed. Yes, it is possible that a sportsbook may have to pay out an enormous sum if too many bets succeed at the same time.

So yes, although the sportsbook will assign odds initially based on probability, the decision is also about covering potential losses. It is, after all, possible that a sportsbook may even go broke in exceptionally difficult circumstances.

What Are Good Odds?

What constitutes as good odds is very much up to interpretation. If a bettor has a solid understanding of, and feels like they know unquestioningly who the winner will be, they will also spot good odds.

Perhaps a star team isn’t performing well, and is going up against an underdog that has been tearing up the ranks. In that case the underdog isn’t necessarily an underdog at all.

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