Welcome to our sports betting guide. We hope that anyone who is new to sportsbook betting or who bets regularly can benefit from the sports betting guide. What is covered in the sports betting guide?
We hope this information can help improve your fixed odds betting or help you start betting on sports.
If you want to start sportsbook betting regularly you may find this information useful. We will look at some terms used in the fixed odds betting industry and bookmaking theory. You can apply these concepts to any sort of betting. We’ll help you choose an enjoyable betting market. We will discuss the betting overround. More importantly we’ll discuss the betting underround (we’ll explain why in a moment). We’ll teach you how to spot an underround and how to exploit the underround when you discover one. Using an underround is a way of finding value in the fixed odds bookmaker’s odds. But first…
A sports book is a collection of sporting events where a bookmaker makes predictions on various aspects of a sporting event and offers odds on these aspects. This stable of sports and odds is called a sportsbook.
Bookmakers are a business are they not. They need to make money to pay their staff and the odds compilers. The probability for each event is calculated and then the odds compilers calculate the odds. The odds are made slightly shorter than the true liklihood of an event happening, which returns slightly less money to the punter. The effect is that if you add up all the percentage probabilities for the each outcome in the bookmakers sportsbook the total would be more than 100%. The amount over 100% represents the bookmakers profit margin and is called the overround. This can be calculated for each event or bet and helps with choosing the best bets.
At the outset the bookmaker does not know how much money his odds will attract to the bet. The odds set are based on his personal view and knowledge of the event.
Mistakes are often made and this is an opportunity beat the bookmaker at their own game. These mistakes lead to an underround in the sportsbook. We will explain the theory behind an underround in a moment.
The concept of value is used in investing and can be looked at in the same vein when sportsbook betting. You buy a bet for less than it’s actually worth and turn a profit: this is why knowing how to spot an underround can make sports wagering more profitable.
Before we look at the underround and how it can help you let us consider first the idea of probabilities and finding value.
Simply, you discover value when you find an investment in a particular outcome at a price which is greater than the probability of that outcome occurring. In the context of sportsbook betting the ‘price’ means your potential winnings compared to the stake required. If you are able to predict the actual likelihood of an event happening then you can spot these situations when sportsbook betting. If you spot that the probability of your preferred outcome happening is greater than that which the bookmaker has priced you can profit.
A good way to see how probability works with fixed odds betting is think about what happens when you toss a coin. With betting you need to weigh up the factors that effect the outcome of whatever it is you are betting on: then compare that to what the fixed odds bookmaker thinks.
If you toss a coin, for example, there is even money against either side landing face up (it is a 50% chance). Like a two horse race with both runners having an equal chance of winning. Every pound or dollar put on heads landing face up should only give you £2 back – the £1 win and the £1 stake. Placing a bet on a roulette wheel would be even money if it were not for the green 0 – statistically you will lose more than 50% of the time.
If a fixed odds bookmaker were to offer you a price of 2/1 for the coin landing heads up, then they’ve given you a value opportunity. Every pound or dollar you put on heads will give you £3 if you are right (the £2 win plus your original £1 investment). You have the chance to invest at odds greater than the probability of the outcome. In yoda’s words value you have found. And the fixed odds bookmaker has presented you with an underround on that event.
So the underround works in the opposite way to an overround. Sometimes a fixed odds bookmaker will price up their sportsbook when the sum of the probabilities quoted for all possible outcomes will be less than 100%. The amount under 100% represents the underround. The underround occurs when there is an unbalanced sportsbook.
As a betting enthusiast you need to spot underround opportunities. Time for a reality check…. bookmakers are very good at pricing fixed odds bets and ensure they do not loose out in the long run. They offer prices shorter than the true odds so they can guarantee themselves a profit. The art of successful sportsbook betting is to find fixed odds bookmaker’s offering odds that are shorter than the true odds. If you can consistently do this you will have learnt the secrets of professional sports investors.
With the advent of online betting and betting exchanges, the popularity of arbitrage sports betting and making Dutch books against bookmakers has expanded significantly. Betting exchanges in particular act like a stock exchange, allowing the odds to be set in the course of trading between individual bettors, usually leading to quoted odds that are reasonably close to the “true odds”.
If you know how fixed odds bookmakers calculate profit margins on their sportsbook it should help you with your sportsbook betting. The method to calculate an overround is the same as that to calculate an underround.
The fixed odds bookmaker factors in a percentage profit margin on every event they price; this is normally 4%. They do this by offering shorter fixed odds of each outcome than the true likelihood of it happening. This built in profit, as we’ve discussed, is called the overround. The easiest way to see how a fixed odds bookmaker guarantees himself a profit is to work out the amount you would have to stake if you backed each possibility to return £100. The percentage probability (or decimal odds) of odds is easy to work out…. as easy as 123 in fact.
Fixed odds of a horse to win a horse race is 12/1. Lets see how to work out the percentage probability or decimal odds…
1. 12/1 is the same as 12 divided by 1. 12 divided by 1 is 12
2. add 1 to the answer above; in this case 12 add 1
3. divide the answer from 2 above (13) by 100. In this example the answer is 7.692% (using 3 decimal points to maintain accuracy)
These figures mean exactly what they say; to win £100 you would have to stake £7.69 in this example.
Add up of the figures of percentage possibilities in any particular sporting event and you will see how much profit the fixed odds bookmaker wants to make. Lets use a match bet to show how this works. Our bookmaker has given both teams A and B odds of 10/12 (no draws allowed). Doing our quick calculation shows that the percentage probability is 54.555%. You would have to bet £54.55 to win £100 back. To guarantee a return of £100 by betting on both outcomes you would have to place £109.11. The difference between what you have to bet and the £100 is what the bookmaker takes as profit (the over round).
When a bookmaker offers odds on a football match with no option for the draw this will probably be Asian odds or Asian Handicap Betting odds.
One of the first steps to enjoyable betting is to select the best markets. You can do this by taking into consideration the overround that the fixed odds bookmaker could make. Also by looking at how often you might find an underround.
It is important to take a step back and look at the fixed odds market as a whole. What sports and markets might be the best? You need to choose markets where the fixed odds bookmaker is more likely to make mistakes and offer longer fixed odds than they should. Consider the over round of each market. If you choose markets with a high overround you will loose in the long run. A typically poor market is horse racing where the overround is always high…. representing the 4% profit margin on every horse. The only money in horse racing is from professional tipsters who know the horses and industry, or you could use bespoke software. More recently there has been a lot of guides on laying horse racing. Laying horse racing is a good way to generate profits in horse race betting. We won’t talk about this here, but, you may want to visit our horse race laying guide.
Tipsters know how well the horse ran the week before, what credentials the trainer has, the condition that best suits the animal, and many other factors. Fixed odds bookmakers also price up football matches very well so these are best avoided, unless you make bets whilst the game is played. This is the ‘in running market’. If you act quickly you can get your bet down before the bookmaker notices a change in circumstances… it starts to rain or a player is injured. Exchange betting sites often offer better fixed odds and are said to be closer to the true odds.
Using knowledge of the overround and underround that fixed odds bookmakers use and how they price the sportsbook you should be able to improve your sportsbook betting. Good luck!