How Bookies Calculate Odds?
As a bookie, you’re not going to actually calculate the betting odds.
Could you imagine trying to create the betting lines for thousands of weekly betting markets? It isn’t possible and it’s not the bookie’s job to worry about maintaining the odds.
So, whose job is it?
Your pay per head (PPH) service will handle odds management.
How Are Betting Odds Calculated?
It’s still a good idea to understand how betting odds are calculated if you’re a bookie. Essentially, this is how it works:
Professional oddsmakers will release the “opening line” (first betting line released for the market) for a game/event with the goal of attracting even action on all outcomes (balanced book).
Oddsmakers utilize computer algorithms, betting models and more to create the opening line.
Now, these oddsmakers are great at what they do, but they’re not perfect.
After the opening line is released, sports handicappers will jump at the lines they deem valuable. As the action starts to come in, the oddsmakers will make adjustments to try to balance the action.
The recreational betting public normally won’t start betting until closer to game time.
Oddsmakers continue to adjust the betting lines based on the action (supply/demand).
It’s important to note, betting odds aren’t created based on expected results. Oddsmakers create betting lines that will attract action on all outcomes based on public perception.
Having sharp odds is imperative as a bookie and we rely on PPH services to perform this.
The Patriots host the Dolphins in an upcoming NFL game and they’re -275 moneyline favorites to win. Imagine your sportsbook had the Patriots at even money (+100). You’d have thousands of NFL bettors wanting to bet the Patriots ML and you’d end up going out of business if NE won.
While the example above is extreme, it illustrates why odds management is so vital to your success.
When it comes to releasing opening betting lines, a few bookies always release lines earlier than the competition. These online bookies take a lot of sharp action and then once the odds settle, they’ll be released across the industry, at which point your PPH will price up the market.
Can I Create My Own Betting Odds As a Bookie?
You can definitely create your own betting lines, but we only recommend it in limited circumstances.
For instance, if you live in Cleveland and 90% of your players are local, you’re going to have a lot of guys betting on the Browns (NFL), Indians (MLB) and Cavaliers (NBA).
One thing we recommend to do in a situation like this is to shade the lines a bit.
Add a little bit of extra juice on the local teams or add a ½ point to spreads. It’s likely your players are going to bet the local teams anyways, so why not increase your hold percentage a bit?
When you use a PPH to power your online sportsbook, your players will have thousands of markets to wager on from every sport, including things like volleyball, cricket and eSports.
Trying to adjust the odds for betting markets you’re not familiar with is a terrible idea.
Would you operate on yourself or would you let a surgeon handle things? Well, the same is true when it comes to odds management. Let the experts ensure all of your bases are covered.
Sports betting odds can move very fast, but a reputable PPH will have in-house experts adjusting lines 24/7 based on market demand and how the rest of the market is moving.