Every year about three quarters of adults of the UK engages in some type of gambling. Although the majority are able to afford lottery tickets and scratch cards, fixed odds bookmakers are an extremely popular, and highly visible, element of the tradition of gambling within the UK.
With both high-street betting shops and online betting and bookmakers, the top bookmakers in the UK collect and process billions of pounds in sports bets annually. They also play a major part in the sponsorship of many sporting events, such as horse racing and football, and their brands are well represented in top sports venues.
The best bookies
The world’s top bookies include:
Bet365
William Hill
Paddy Power
Boylesport
How do bookmakers work
In the most basic sense bookmakers let you place bets on the outcome of sporting events. They give an “price”, or odds, for every possibility of a particular outcome. The odds are calculated using probability calculations. Bettors place bets with bookmakers with the intention of earning money by correctly predicting outcome of certain events. Bookmakers, however, adjust their odds to gain a total profit from an event regardless of what its outcome.
The measurement of probability
In order to succeed, bookmakers have to predict the probability of different outcomes as precisely as they can. This task is carried out by employees of the bookmaker, known as traders. Traders uses complicated statistical and mathematical tools that take as many variables as possible to estimate the likelihood of any possible event outcomes. Examples of these variables are form injury, weather, and home advantage.
However, these calculations can’t be precise in predicting the future. Traders may fail to account for some aspects. Furthermore, certain factors like weather or injury, can alter suddenly. This could significantly alter the probability of an outcome once odds have already been set or bet on by punters. Bookmakers often adjust their odds when they are preparing to sporting events, making changes whenever the values of variables change.
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A cut to be taken
Although measuring probability as accurately as is possible is crucial for bookmakers to stay in business, it’s not the only way they earn money. If bookmakers merely relied on predicting probabilities, the statistics show that over the long-term both the bookmakers and players who bet with them will end up losing money. Instead bookmakers slightly lower the odds on any occasion, typically by between 5% or 10%. So the odds published by bookmakers are slightly lower than the actual statistical probabilities that they’ve calculated to be specific outcomes.
The percentage by which odds are reduced is known as the overround, and this is what the profit margin of the bookmaker is called. margin.This implies that bookmakers pay out slightly less than they would have had they made payments with the actual odds. This could be that a bookmaker pays out the winnings of $90 for every $100 of bets placed in a particular event. The mathematics behind this may be very complicated.
Balanced books
Bookmakers try to create odds that are as exact as possible, while taking the overround into account. They also believe that all bets placed on an event will balance across all odds based on the laws of probability. When bets are divided across odds for an event in such so that no one outcome can result in the loss of the entire bookmaker, it is referred to as a balanced book. An unbiased book can be considered to be the most sought-after bookmaker because it will guarantee a profit-making betting market.
How do odds differ between bookmakers?
If you’ve ever placed bets on sports before, you’ll have seen the different bookmakers offering different odds on the same event. There are two reasons why this happens. The first reason is that bookmakers may use different statistical tools in order to calculate their odds, and assign different weights to different variables that impact the odds or interpret variables differently. Since calculating probability isn’t an exact science and the impact of variables isn’t always obvious, it’s unlikely that bookmakers will be able to reach a consensus on the odds for an event.
The second reason that odds differ is because bookmakers are competing with each in order to get customers. For instance one bookmaker that offers higher odds on the race that is the favourite for a race than other bookmakers will bring in more bets to the race. Every bookmaker is bound to offer its customers “best rate” on the race or market periodically. To try to attract new customers and outdo each other, bookmakers sometimes offer higher odds than those that are statistically probable. However, their odds must to be lower than the real odds the majority times if they’re to ensure an income.
An alternative that is popular to bet on the odds of bookmakers is by using an exchange for betting, where users set odds.