Have you ever wondered who sets the betting odds? Or, did you assume, like me, that the sportsbook (bookmaker) as an entity is responsible for setting the odds as well as managing all facets of a successful sports betting agency?
It turns out that the oddsmaker is a specialist position and is one of the most important parties involved in the world of sports betting.
Therefore, let’s look at the differences between an oddsmaker and a bookmaker as well as their individual roles and functions within the successful sportsbook.
What is an oddsmaker?
Dictionary.com defines an oddsmaker as a “person who calculates or predicts the outcome of a contest, as in sports or politics, and sets betting odds.”
How do they determine or predict the different outcomes of a match?
Determining the betting odds is not a perfect science simply because the process involves several people, including the members of a sports team, individual players, as well as the team of people who fulfil the oddsmaker’s roll.
In order to calculate the odds for bets like money lines, point spreads, singles and accumulator bets, and game totals, the oddsmaker must study game conditions, the team’s form over history, the individual team members’ form, and the historical rivalry between the two teams involved in the encounter.
For example, the oddsmaker is tasked with drawing up the fair book for an English football match between two teams. Based on the statistical analysis of the teams, their rivalry, the grounds, and the individual players’ form, the oddsmaker comes up with this example:
Home win: Even odds (1-1). In other words, each team has a 50% chance of winning at home.
Draw: 2-1. There is a 33.34% chance that the teams will draw the match.
Away win: 5-1. There is a 16.66% percent chance of an away win.
It’s important to note that the percentages of the probabilities add up to 100% (50% + 33.34% + 16.66%). This is what is known as a fair book with realistic odds.
What is a bookmaker?
At this juncture, it is essential to note that, should you wish to start placing bets on some of these options, you must first sign up with a sportsbook (bookmaker). It is also worth being cognisant of the fact that most, if not all, sports betting agencies offer a wide variety of bonuses, on a bonus code like the Betfair bonus code, that you should consider accepting.
The point highlighted above, although seemingly irrelevant, is pertinent to the whole sports betting process. There are no other options to wager on sporting events, except via a sportsbook.
A bookmaker’s primary function is to accept the betting lines from the oddsmaker and then adjusts the odds on these betting lines to add the bookmaker’s margin or overround.
The statement, “the house always wins,” is pertinent to this topic. And, it’s the bookmaker’s role to ensure that the house, or sportsbook, profits from all of the bets it offers its clients.
Let’s pick up from our earlier example. The fair book that the oddsmaker created gets handed over to the bookmaker who must add the bookmaker’s margin while still keeping the ratios in proportion. The simplest way to do this to use the ratio 3:2:1.
Consequently, the final betting odds on this football match are now:
Home: 4-6 (60%)
Draw: 6-4 (40%)
Away: 4-1 (20%)
Finally, it’s essential to note that the probabilities in this book add up to 120%, not 100%. The extra 20% difference is the bookmaker’s margin.