What is the mathematics behind sports betting?
If you have an interest in betting on sports, there are two main ways to approach it. If you have a logical mind, then you may have read an article or two about how the system works.
But you’ll probably have some questions. You may want to know how the math and logic of sports betting work.
The second kind of bettor in sports follows his gut feeling and is less interested in reading about the technical details.
A third kind of person is one who makes a hobby out of sports, then tries to make a career out of it. Let’s say you love playing sports and now you’re trying to turn that into a business. You can’t be blamed for that.
Sports betting is a popular activity for many people. Perhaps you’ve spent vast amounts of time reading about possible techniques and strategies, but do you really understand the mathematics behind sports betting? In this article, we’ll be taking a closer look at just that.
Mathematics in Sports Betting
Before we take a closer look at the math behind betting on sports, let’s consider whether there is much mathematics involved.
When it comes to setting odds, sports betting involves several mathematical principles.
The Mathematics of Betting Odds
Some people have been betting on sports for years and are familiar with the most common types of odds.
Let’s take a look at the three main types of odds that are used on the usual markets. The first type is fractional odds, which are written as 1/2. Decimal odds are written with a decimal point: 1.5. American odds, also called moneyline odds, are written like this: +135.
Bookmakers express each type of odds differently, but they all involve the same mathematical concepts. Here’s how you can tell what a bookmaker means by each kind of bet.
American Odds
In the United States, bookmakers write odds in a format called American odds, which are also known as Moneyline. If you wager $100 on a team that wins, you would receive $100 back plus your original stake ($200 total).
When you see a sports score, the team with the positive number is the favourite and the team with the negative number is the underdog.
If you want to win 100, you need to bet 120. But if you bet 80, you could win 100. Later on, we’ll explain how bookmakers set odds.
Decimal Odds
The odds you see in this type of situation are very similar to the odds you’ll see in other situations.
Bookmakers favour odds in the form 11.00 or 25.00. To understand these odds, you must know that if you bet on 11.00 and your horse wins, you will receive 12 times your stake.
For example, if you bet 1 dollar plus earn 11 dollars in profit, or if you bet on odds of 25.00 and win 26 dollars.
You can think of the odds as a fraction — the number before the decimal point is the numerator and the number after is the denominator.
Fractional Odds
Fractional odds are a variation of decimal odds that can be expressed in the format 5/1. This means that for every 1 you bet, you stand to profit 5.
Changing Between Formats
Here is a demonstration of how to go between different types of odds. This is not a how-to guide, but rather an explanation of some of the intricacies involved in changing between odds. We will assume that all our examples deal with positive numbers.
You might be wondering how to convert decimal odds into Moneyline odds. Well, it’s actually a pretty straightforward process. Let’s say that you have decimal odds of 9.00; in order to change them into Moneyline odds, you’d have to do one of two things. If the decimal has a value of 2 or more, you’d subtract one from the decimal number (9.00 – 1 = 8.00), then multiply that new number by 100; this would give you 800%. Conversely, if your decimal value is less than 2, simply divide the decimal number by 2.
So that would look like this:
9.00 is the same as (9.00 – 1) × 100. That equals 8.00 × 100, which is +800.
To change a decimal into a fraction, you would follow these steps:
To simplify a decimal fraction, you first need to convert it into an equivalent fraction with a denominator of 100. Then, you can subtract one from the number and reduce the resulting fraction as far as possible.
1.75 = 1.75 – 1= 0.75= ¾
We won’t do anymore conversions because we just wanted to show you how much math is involved in sports betting.
Next, we’ll be exploring the mathematics that bookmakers use to set the odds.
How Sportsbooks Work
To understand how a sportsbook calculates betting odds, we must first look at the mathematical principles behind margins.
When you bet on sports, the amount that you win or lose is not exactly what you bet. The sportsbook will add a certain amount to every wager in order to make a profit. This amount is called vigorish, and it represents the bookie’s cut.
For example, if you bet $/€/£10 on a game, the sportsbook will usually charge you $/€/£11. The extra dollar is called “the vigorish” or “the juice” for short.
When you lose your bet, the bookie uses the money that was bet on the winning side of the bet to pay off the losing side. Because of this, bookies don’t have to pay out any cash but can keep the vig (percentage) from both bets.
Many sports bettors misunderstand this principle, but it’s vital for the industry.
How Bookmakers Set Odds
Before we look at how bookmakers set odds, let’s examine why they do so and what odds are.
Bookmakers offer odds to make it easier for bettors to choose a team – and also to balance out the number of bets placed on each team.
Bookmakers want to make a profit, but they also want to encourage people to bet on both sides of the game.
If people didn’t have the chance to bet on their favourite contender, they’d bet on the favourite most of the time.
Most people think that the favourite is the most likely to win. However, the odds don’t always indicate this; sometimes the underdog wins.
How are odds determined? Well, there’s math involved! Bookmakers use a sliding scale to calculate the likelihood of two opponents facing off against each other.
In order to make the odds more equitable, bookmakers will sometimes reduce the odds on a favourite and increase those on an underdog.
Some bookies offer odds that are wildly different from those provided by other bookies. These odds are based on a statistical probability of teams winning, or on the public perception of probability.
They’ll try to get bettors to wager on both sides by adjusting the odds.
But What About Sports Betting as a Whole?
We’ve spent quite a bit of time looking at how mathematical principles affect sports betting odds. We hope that you will learn many things from this article.
You can convert all the odds formats into each other.
You should also know that bookmakers use mathematical principles to ensure that both sides of a bet have an equal chance of winning.
In addition, you know that a percentage of every wager is added to the bet as a commission and is called the vigorish or vig.
The Main Principle Behind Setting Odds
What is the most important mathematical principle? The ability to calculate odds. Bookmakers adjust their prices depending on how many people wager on each contender, so if the favourite becomes more expensive to back, it becomes less attractive.
When you wager on a favourite, the odds on that team increase and so does your payout. Conversely, when you bet on an underdog, the odds decrease and so does your payout. This is because sportsbooks use funds from one bet to pay another.
If you bet on an underdog and win, you’ll earn more because more people believed the underdog would fail.
If you bet on the favourite and win, you’ll get less than if you had bet on the underdog. Sportsbooks charge more for backing favourites because they need to protect themselves against losses if the underdog wins.
Sportsbooks often offer better odds for betting on the favourite, which is why they don’t require a large amount to pay all of the people who placed bets on the favourite if the favourite wins.
The math behind sports betting is simple. The average of two numbers, combined with a basic algebraic formula, creates an accurate predictor of whether a team will win or lose. This system has served bookies well since the 1790s and will continue to do so for many centuries to come.
Conclusion
We hope you enjoyed reading this article on the math behind sports betting. We’re sorry that we couldn’t provide you with more information, but there are so many mathematical principles involved in wagering on sports that it would take an entire book to look at them all in detail. If you want to become an expert on the topic, then please check out one of these books: [List some popular books on the topic] Also, do not forget to check our chart with the bookies with the highest odds for EU and ROW. Thank you for joining us and good luck!