Anyone who places bets on sports is looking for ways to gain an edge on the bookmaker. Not only is it necessary to choose the right side – it’s also important to know where to place your bets and what lines to choose at that bookmaker. In this article, we take a closer look at how bookmakers operate and how to use this information to maximize your profits.
How to be Successful at Online Sports Betting – First Understand How Sportsbooks Operate:
Online bookmakers accept money from bettors on a variety of sporting events and outcomes. All sportsbooks employ teams of experts (known as odds compilers or traders) that analyze everything when setting their betting lines – current form of the team, weather/playing conditions, player injuries and suspensions, home field advantage, even the referees working the match. These in-house experts set and move their lines as conditions warrant, and the sharper they are, the more profitable the sportsbook.
When the game is over, they pay out the winners and keep a fee for their service on each bet. This fee is also known as the betting margin. For a betting operation to be successful and remain in business, they must make a profit. To accomplish this, they must set competitive odds that attract clientele but do so in a way that balances the distribution of money.
Understanding the Betting Margin:
To be successful as a bettor in the long run, it’s not just about picking the sportsbook that offers the most appealing odds. You also need to know how much of your winnings they are keeping in the form of the betting margin. Margins vary depending on the betting market. Popular and competitive markets like Premier League Soccer or American Football will have lower margins because the sportsbooks know they need to be competitive. However, exotic markets and wagers will often see larger margins because they are harder to find.
Let’s take a look at an example using a typical English Premier League betting line in the traditional 1X2 odds format (1=Home/X=Draw/2=Away):
Sportsbook #1
| Side | Decimal Odds | Probability (1/Odds) |
|---|---|---|
| Home Team Manchester United | 1.833 to win | 1/1.833 = 54.56% chance of winning |
| Draw | 3.610 | 1/3.610 = 27.70% chance of a draw |
| Away Team Manchester City | 5.060 to win | 1/5.060 = 19.76% chance of winning |
If you add up the probabilities for this 1X2 betting line, you get the following result:
54.56 + 27.70 + 19.76 = 102.02
To determine the margin, simply subtract 1 from this result: 102.02 – 1 = 2.02%
The margin at Sportsbook #1 is 2.02%. So for every $100 won, the sportsbook will keep $2.02 as their profit.
Sportsbook #2
| Side | Decimal Odds | Probability |
|---|---|---|
| Home Team Manchester United | 1.680 to win | 1/1.780 = 59.52% chance of winning |
| Draw | 3.390 | 1/3.390 = 29.49% chance of a draw |
| Away Team Manchester City | 4.910 to win | 1/5.010 = 20.36% chance of winning |
If you add up the probabilities for this 1X2 betting line, you get the following result:
59.52 + 29.49 + 20.36 = 109.37 – 1 = 9.37%
The margin at Sportsbook #2 is 9.37%. So for every $100 won, the sportsbook will keep $9.37 as their profit.
Although these two sportsbooks offer competitive odds, your profits over the long run will be greater at Sportsbook #1.
How Do Margins Affect Your Betting?
A simple rule of thumb is this – the higher the margin, the lower (or worse) are the odds. In the long run, a bettor would have to make more successful bets at the “pricier” sportsbook to reach a break-even profitability. Although this is not as important for the infrequent gambler, the high volume player must factor this in or accept lower winnings.
Click here to read Part 2 – How to be Successful at Online Sports Betting: Avoid Betting Bias
