In this paper, the odds for football & other sports betting explain exactly – how they are calculated, how they are to be understood and more. Bookmakers have to assess the probability of the occurrence of a certain event in the future correctly.
The probability of fixed odds bookmakers is based on this calculation. Larger betting shops work with these comprehensive, statistical materials for all types of sports and leagues (for Bundesliga, Champions League, World Cup, European Championship).
Here, the bookmaker take great risks because the stakes are very high and often probabilities are not always calculate correctly. To limit this risk, betting is offered on all possible outcomes so that, ideally, the profit can be made by arbitrage. However, it can still come in huge losses.
In 1996 in Las Vegas, bookmakers and casinos are lost $ 50 million from the knockout win over Mike Tyson Evander Holyfield of the boxing match for the world title in the heavyweight division. There are fixed or variable rates e.g. available on win, lose or draw. At fair odds of the bookmakers would borrow money to pay the losers pay the winners. The real odds look very different. They are lower.
Hence the profit of the bookmaker. The payout ratio at Oddset is between 50 and 60 percent. The sum of the probabilities is always 1 Explanation: For example, one bookmaker estimates the probability of the match against Stuttgart, Hannover 96 as follows:
- Stuttgart victory: 60% / 0.60
- Draws: 25% / 0.25
- Hannover victory: 15% / 0.15.
He then calculated the fair rates according to the following formula fixed: (here is the Q ratio and the probability W) W: Q = 1. For the example above resulted in the following ratios:
- Stuttgart victory: 1.67 (= 1: 0.6)
- Draws: 4 (= 1: 0.25)
- Hannover victory: 6.67 (= 1: 0.15).
These are fair odds of the bookmakers, and it is multiplied by a factor that is less than 1. It is the profit of the bookmaker. He retains e.g. 20 percent of the stakes one, which are multiplying and the fair odds with the value 0.8. Let us say, our bookmaker is very fair and will pay 90 percent of the stakes again as profits, then it multiplies the odds by a factor of 0.9. When real rates are then:
- Stuttgart victory: 1.5 (= 1.67 * 0.9)
- Draw: 3.6 (= 4 * 0.9)
- Hannover victory: 6 (= 6.67 * 0.9).