How Bookmakers Set Odds

If you are going to have a bet on a regular basis then it is vitally important that you fully understand betting odds and how they work. Odds prices are simply a number that indicates to the bettor the financial return that is available if that selection wins.

1. How To Bet With Odds
2. How Do Bookmakers Set Live Odds
3. How To Bookmakers Calculate Odds

For each event a book is created that gives the betting odds for each competitor/team taking part. These odds roughly reflect the real probability of that competitor winning but will give an indication of the chances.

The odds of Manchester City winning the Premier League will be much shorter than for Everton winning it, this is because the bookmaker believes – based on their research and evidence – that City have a better chance of winning the title than the Merseyside team.

The lower the odds a bookmaker offers, the more they believe that scenario will occur. Odds, however, are impacted by lots of things, such as popularity – the more people bet on something the lower the price goes; and opinion – the more positive noises there are the lower the prices go. This is why it can be possible, on rare occasions, to find odds that are actually better than probability dictates.

Remember though, prices also have a profit margin for the bookie built in, so on balance, odds are always lower than real probabilities dictate. This is why they say “the bookmaker always wins”.

Different Odds Formats Explained

There are three main ways of expressing odds, namely decimal odds, fractional odds, and American odds, with other Asian variations such as Malaysian, Chinese, and Indonesian.

Naturally the bookmaker is not going to set generous odds on the favourite team, or else every. Finding value and profit in the odds set by bookmakers. Understanding how bookmakers set the odds is vital to being able to find value. Find out how the odds are affected and why poor value limits your profits.

Fractional Odds

These are the odds that most of us in the UK grew up with. Go into any bookmakers shop and the odds will be in fractional form. In Britain, you will find everyone seems to talk about their selection being 2/1 rather than ‘oh it’s 3.0.’

How do you go about understanding fractional odds? Well, if a selection is priced up at say 5/2, then for every ‘2’ you bet, you will get ‘5’ back; the figure on the left indicates how much you’ll win and the one on the right refers to the stake needed to win that amount. Therefore, if you place £2 you will win £5 plus your stake back (£7 total). This is described as being odds against, or positive odds.

Many bets, as is the case with a lot of favourites, will be odds-on or negative. That means the figure on the left will be smaller than the one on the right. If it’s 10/11 you have to bet £11 to win £10, plus your stake back.

There’s a whole range of fractional prices available, for example, 2/1, 9/4, 5/2, 11/4. In that example, each of the odds is slightly higher than the previous one. Recent years have seen more fractional odds appearing, such as 11/5 and 85/40, to allow for minor changes and cover a wider range of prices.

Learning the fractional odds is really important if you want to be able to successfully gauge how the market is moving. For example, which of these odds is the shortest: 7/5 or 11/8? It’s simply a case of dividing the figure on the left by the one on the right. 7 divided by 5 = 1.4 and 11 divided by 8 = 1.375, therefore 7/5 is slightly higher than 11/8.

Decimal Odds

If you grew up in Europe you may be more familiar with decimal odds. It makes sense given that Europe has embraced the metric system whereas in the UK we are still semi-Imperial, hence the fractions for odds.

The rising popularity of online betting however means that even if you are British you will have encountered this format more and more. Especially if you’ve tried betting with more continental bookie’s sites where the default odds can often be decimal, or if you’ve tried more exotic bets such as Asian Handicaps, where odds are generally shown in decimal.

With decimal odds the big difference is that the odds shown include your stake money that will be returned if you win. For example, 2/1 in fractional odds simply explains that if you stake £1 then you’ll win £2, plus your £1 stake back. Now, in decimal terms, this is represented as 3.0. This means for a £1 stake you will receive £3.00 back if your bet is a winner, however, there is no need to add your stake back on as it is included already.

The key figure in decimal odds is 2.0, the equivalent of evens in fractional betting. If the decimal odds are less than 2.0 then this is the equivalent of an odds-on shot in fractional odds. For example, 1/2 in fractional odds is 1.5 in decimal, as £1 wins you 50p so your return is £1.50.

American Odds

American odds are also sometimes called lines or money line odds. These do take a bit of getting used to from my experience.

For positive odds, you’ll see a “+” sign, and this tells you how much you’d win with a stake of 100 units. For negative odds you will see a “–” sign, and this shows how much you will need to stake to win £100.

For example, if the fractional odds are 4/1, the decimal odds would be 5.0 (as it includes the return of the stake) and in US odds it would be given as +400. Here a stake of 100 will generate a profit of +400 if the bet wins.

For negative odds of say 1/4 (1.25 decimal) American odds would be -400, showing you how much you will need to stake (400) in order to win 100.

Other Odds Formats

Other odds formats exist such as Hong Kong, Indonesian, Chinese Malaysian and others, although these are rarely found as standard at any sites a UK punter would use.

If you want to bet with these odds formats you may need to shop around a little. BetVictor, for example, are good for offering 5 or 6 variations.

In summary, other odds formats work as follows:

Hong Kong / Chinese Odds

This is basically the same as decimal however it doesn’t include the stake. So whereas evens in decimal format is 2.0, in Chinese it would be 1.0. 7/1 in decimal would be 8.0, in Hong Kong it would be 7.0, etc.

Indonesian Odds

Very similar to American odds except measured in units of 1 rather than 100. When positive, the number reflects the size of the bet needed to make a profit of 1. When negative, they show the profit you can make from a wager of 1.

Malaysian Odds

Similar to Indonesian odds, Malaysian odds are also based on units of 1, however, the system is inverted. When odds are positive, say 2/1, in Malaysian this is represented as -0.5, you multiply the stake by odds to give profit; for every one unit profit you need 0.50 stake. For negative odds, you divide the stake by the odds, e.g. 1/2 is now 0.5; you make a profit of 0.50 for every 1 unit staked.

Odds Conversions

Once you get used to it, conversions between these different form of odds is fairly straightforward. 4.0 in decimal means £1 will see a return of £4, a profit of £3, so it’s 3/1 in fractional. For the US odds £100 would win £300 so it’s +300.

When you bet online you are given the choice of how you want the odds to be represented. Just click on the one you feel most comfortable with. You can usually toggle between odds at any time with a decent betting site and it is almost instant, so you can switch between them if you want to start getting used ot another format.

Setting Odds and Bookmaker Margins Explained

A bookmaker will offer their customers odds for each event they cover. However, this is a business after all, so they will ensure that the odds that are produced will contain a bit of profit for themselves.

This isn’t necessarily a fixed commission on each bet but rather it is calculated as an overall margin taking into account all the possible bets for a given event, known as a book. If a bookmaker balances a book and takes equal proportions of bets on all outcomes, then whatever the result there will be a profit made by the bookmaker.

How is this achieved? Well, the odds that they offer overall will be slightly less than the true odds overall. The difference between these numbers is the profit margin.

Calculation of odds is defined by many parameters and with real world events like sports it is only a best guess made by a bookmaker. The trick for them is to make all of their guesses slightly conservative, so that on balance they will always win. The bookmaker can get it wrong, though.

How To Bet With Odds

Odds are set by both software and odds traders that take into account as much information as possible before setting a price that balances their risk vs attracting people to bet on the market. Remember, bookies need to be competitive at the same time as making money otherwise no one would bet with them. Here are some factors that go into how odds are set:

• Previous form and history of results.
• Popularity of the market, how many people are backing it, and how much are they staking.
• Opinion; what are the experts, pundits, managers, players, etc., saying.
• Other bookies; if all the betting companies start shortening odds then the rest will generally follow.
• Bookies will often inflate or reduce odds to attract or prevent bets on one side of a market to balance a book.
• Risk; the higher risk an outcome is judged to be the more conservative the odds, this happens a lot in one-off or rare events where information is scarce.

Making a Profit

Let’s take a simple example of a match result for a tennis game to limit the number of outcomes to two; win for Player A or win for Player B.

Now, the bookie wants to price the markets to attract people to bet on the outcomes but without leaving them overexposed either way.

The match has one favourite and one underdog, the favourite is priced at 2/1 (3.0) and the underdog priced at 2/5 (1.40).

To work out the margin, divide 1 by the odds in decimal and multiply by 100. Do this for all selections (in this case two) and add them together:

((1/3.0) x 100) + ((1/1.40) x 100) = 33.333 + 71.429 = 104.76

Now subtract 100 from that number (104.76 – 100) and this gives you the margin the bookmaker is taking on that market, 4.76%.

If the bookie can take an equal proportion of bets on both sides then they ensure they always win. If they end up with an unbalanced book they will often increase odds on one side and decrease bets on another to try to balance it up. This is an opportunity where some punters can take advantage of odds that can sometimes be better than probability would dictate. Bookmakers call these weak lines.

How Do Bookmakers Set Live Odds

Guide to Beating the Odds

It’s not easy of course to get one up on the bookmakers, they have many more resources to throw at getting their odds right, but they also have thousands of markets to cover, so there will be some times when in setting their odds they haven’t quite taken everything into account.

It won’t happen often as bookmakers employ experts to set their odds and not much gets past them, especially with the main sporting events where lots of information is available and markets are widely bet on.

The best way to beat the odds is to bet on things that are either very skewed one way (encouraging weak lines) or bet on events where there is less information available and therefore more opportunity to find an advantage.

Obscure Markets & Novelty Events

This is a double-edged sword. With many lesser known sports events or novelty bets the odds traders have a difficult job pricing an event. Most bookies wait for one operator to set odds first and then the rest follow. But what if those first predictions are not very accurate?

This is an opportunity for punters. Let’s say you think you’ve spotted the next Chess Champion but the bookies are still pricing them highly, this is a chance to exploit your knowledge at the companies expense.

A word of caution, however; the less that is known about a market the riskier it is, and the riskier it is the higher the bookies’ margin will be. You will therefore need to be fairly good at spotting these advantage to win this way over a period of time.

Do Research Yourself

A bit of research is really useful here and there’s plenty available online, but rather than looking at the stats, look at news stories. For example, a player whose partner has just given birth might not be getting all the sleep they should – Andy Murray’s form dipped a bit after he became a father.

Does the bookie know that the obscure player on the Challenger circuit just became a father? Might a player have a bad record in some tournaments and so have a mental barrier to overcome? All that research might just get you a winner at a better price.

Look at the odds the bookmaker has set and consider what odds you’d have set yourself. If a player is 2/1 and you think he should be 6/4, then pounce on the 2/1 that is being offered. It’s your prediction against theirs after all, and you might just be right.

Human Error

Human errors can occur and there will be some odds that in hindsight look too good to be true. Betting on elections can be profitable as the opinion polls aren’t always to be trusted, take the 2015 UK General Election, for example, or the EU referendum, or the US Donald Trump Election – need I go on?

The close vote predicted wasn’t what eventually happened and the bookmakers are over-reliant on statistical markers such as polls.

Ocassionally you will find a genuinely mispriced market where the odds have been output incorrectly. By all means, bet on it, but in all likelihood the bookie they will void the bet once they spot it; bookmakers have terms that cover them for ‘palpable errors’ where they can claim an obvious mistake.

The Hunch

How To Bookmakers Calculate Odds

If you believe a horse that is about to make its racecourse debut may be a future superstar, then some good odds, particularly in ante-post betting markets, may be available.

In sports, particularly in horse racing, selections can drift around a lot in the market in the run-up to an event. If a horse’s odds end up drifting out and you don’t believe that should be the case, then you can get a better priced winner.

After all, the horse doesn’t know he’s gone out from 8/1 to 12/1, but most people think it won’t win so the bookies have increased the odds to balance the book.

Look Around for Better Odds

Make sure you look around for prices to get the best deal you can, just as you would if you were shopping for anything else. The best way to do this is to open a few different online betting accounts. One bookmaker might just have your selection available at a slightly higher price, so in this way you can take advantage. You can also take advantage of welcome offers when you join to further increase your chances of winning.

Search for enhanced odds, often termed price boosts, that bookmakers offer as well, they exist to attract your initial custom in what is a highly competitive market.

Many bookies will price boost markets and effectively sacrifice their margin or use it as a loss leader to get you betting with them. Take advantage of these between different operators to give yourself the best advantage. At the same time, you should still do some research just in case there’s another reason for the higher price, injury for example.

Best Odds Comparison

If you are interested in online betting and placing bets, that also means that you are probably interested in getting the best odds for your bets. And why not too, because if you correctly predict the outcome of an event, then you want to be rewarded fairly for it.

First thing's first, there is a huge discrepancy in what bookmakers offer as far as odds are concerned for the same event occurring. Just one look at the sites of two different bookmakers right now will tell you that the reward on the same outcome is not the same. Sometimes the odds are not even close, and indeed some bookmakers will have a reputation of giving more generous odds than others, for example. Such is the nature of online betting.

When it comes to sports betting, then, it's really important to shop around for your odds. However, this creates a major problem: there are many different bookmakers out there, so how can you possibly explore each one to discover if you have found the best odds on any particular event?

This issue alone means that most of us just set up one or two bookmaker betting accounts, and therefore only commence online betting with one or two companies at best. That means that for the majority of the time, you are not securing the best odds for your bets, which can make a big impact on your winnings, especially over time. What you need to do is make sure that you are placing bets at the best odds each and every time. That's where our odds comparison site comes in.

Not only is our site built from scratch for the very purpose of comparing all available odds on any given market, we regularly update odds to ensure you constantly see the best odds available on your chosen event. What is more, you can then automatically load your bet to be placed with the bookmaker with the best odds.

Please note we do not place bets on your behalf, and you must personally create an account with the bookmaker you wish to place the bet with.

Bet Compare

So how does CYO work? Our platform operates like a price comparison site, such as you might use for buying car insurance, for example. Our API covers numerous bookmakers, including all of the most popular (such as William Hill, Ladbrokes, Bet365 and Paddy Power), and our system has the capacity to constantly scan these bookmakers' sites for the best betting odds on any given event. These betting odds are regularly updated to ensure that the numbers you see quoted reflect the most up-to-date information.

And, of course, there are a whole host of factors which can affect the odds of an event, such as injuries to key players, form, recovery time from a previous match, and even the team selected by the coach. On paper you would always fancy Manchester City to overcome Bournemouth, for example, but if the coach of Manchester City decides to rest his entire first XI as the club has a huge Champions League match following up quickly behind, then of course the odds need to reflect this.

It is for reasons such as those, and many more, why bookmakers manipulate their odds accordingly, and CYO is constantly scanning for such changes in the odds in order to always bring you the best odds. That means that the odds displayed on our site are consistently the best odds that are available online, and exactly why and odds comparison tool such as ours is so crucial to your betting practices.

If you check an upcoming event on comapreyourodds.com, the odds presented for that event will be the best odds as unearthed by our software. By clicking on the event itself you will discover the odds offered by the most competitive three or four bookmakers, which may help to sway your decision as to who you will place your bet with, and at what odds. Of course, in an ideal world you will always want to place your odds at the most competitive price, but the reality of membership with bookmakers and so on may mean that you choose to make an alternative selection. We provide you with this information so you can make an informed decision on how to proceed.

Online Sports Betting

We consider ourselves to be the very best odds comparison site for a number of reasons. The first is the ability of our software to effectively scan the odds of a multitude of the most prominent bookmakers in order to secure the best and most up-to-date odds on any given event. The second is because of the nature of our bet finder system which enables the punter to search for events in any number of competitions across the world.

Indeed, the number of events covered by CYO's bet finder tool is incredible, with offerings from junior leagues and women's competitions as well as the major competitions in Europe and South America, to name but a few of the possibilities. As well as the biggest domestic leagues, you will be able to compare betting odds on leagues and cup competitions across the world – even leagues and competitions that are not covered by the majority of bookmakers. If it is possible to place a bet on the event, then you will most probably be able to find it on compareyourodds.com.

But that's not all that makes our service the best. Far from just receiving an up-to-date comparison of the best odds on any given event, you also get access to a host of other statistics and information which can help inform your betting in the best way possible. It's about an all-round sports betting experience.

The additions we offer include statistics pertaining to the teams' last ten games across all competitions (and relating directly to favoured bet types, such as +2.5 goals, and both teams to score, for example), head-to-head records, team news and precited team line-ups – all information which can help you see the odds for what they really are, compare the odds, and then make an informed choice in your selection.

Accumulator Odds

Sports betting accumulators, or accas as they are commonly known and referred to, are an immensely popular aspect of online sports betting, and this is yet another aspect of odds comparison which really bears fruit for punters.

An accumulator is simply an accumulation of bets which add up to a greater bet. So, instead of betting on one event, you may choose to combine that outcome with a second outcome. Or a third. In fact, there is often no limit to how many bets you can group together this way. Of course, the possibility of all of the outcomes ringing true becomes less and less the more bets you add, but this is exactly how an accumulator works.

As an example, you may be confident that Manchester City, Liverpool, Tottenham and Chelsea will win their respective games on a weekend. All are playing at home against teams from the bottom half of the table. Unsurprisingly, the odds on these outcomes occurring are low. The first thing you want to do, as always, is use compareyourodds.com to make sure you are securing the best odds for each event. However, if you group these outcomes together, the odds will rise positively from your perspective.

And if you think about it, even odds which are slightly different, when added together, will become much greater. For example, four events at 1.20 will become 2.07, but four events at 1.21 will become 2.14. When you start to extrapolate on those numbers, you can see where major gains can be made. That is why shopping around for the best odds is so important, and why using an odds comparison tool like the one offered by compareyourodds.com can be so valuable. Small margins become so much more when you add them together in the case of an acca, or accumulator. The best odds are vital, and compareyourodds.com helps you find them.

FAQs

Why should I use Compare Your Odds?

Using Compare Your Odds is vital for any bettor, no matter what level of success or experience. As stated above, the difference in payouts from different bookmakers for the exact same bets or accumulators can be huge. If one bookmaker is offering a 5-fold acca at 300/1 and another at 400/1, you are missing out on 100x your stake in extra winnings (if the bet wins). Our odds comparison system is built from the ground up and one of the best betting tools available. If you are a regular bettor, there is a high chance you're missing out value on nearly every bet you do. Without checking beforehand it is very unlikely you'll be getting the best odds available. Our system does nearly all of the work for you, just add your selections and watch the bet slip go to work. By using the 'Bet Now' button in the bet slip, you can automatically load all the selections you've chosen here straight into your bookmakers bet basket.

How often are the betting odds updated?

The odds are updated every few minutes and the last update is timestamped in the footer.

Will CYO bring in more betting markets and sports?

Yes, we currently provide odds for thousands of football matches each with dozens of markets. We are continually looking at ways to improve, including increasing our sports coverage. We currently only provide support for comparing Football odds but we're planning to provide Baseball, Basketball, Tennis, Horse Racing, Golf and Cricket Odds.

Do Compare Your Odds take bets?

No, we purely provide Odds Comparison for bookmakers available on the website. In the bet slip we do however offer the chance to automatically load the selections in the bookmakers bet slip for convenience, you can do this by clicking the 'bet now' button. This links externally from our platform and you will be required to login or make an account with the given bookmaker. Our Odds Comparison Site is based in the UK and aims towards the UK market, we will however be branching out into other sports and markets as we expand. All UK fixed odds gambling licensing and regulation can be found at the Gambling Commission.

Which online bookmaker gives the best odds?

The fact is that there is no simple answer to this question, and if there was, there would be no need for an odds comparison tool such as the one CYO offers. If there was one bookmaker that consistently offered the best odds, then no other bookmakers would remain in business, so the fact is that odds will always vary from bookmaker to bookmaker, and very rarely can you say that there is one provider that will offer consistently the best odds. That said, there are sometimes cases of certain bookmakers becoming more competitive on certain types of bets (for example, favourable accumulator odds may be secured on particular bookmaker sites, which is always good to secure), but there are just too many bookmakers to scan in order to find that out every time. The other consideration is the deals that are a featured aspect of al bookmakers, and so creating accounts with a large number of providers is not only recommended, but will facilitate your betting when using the bet finding and odds comparison tool on CYO. In short, no bookmaker will consistently offer the best odds, and that is why CYO is such a useful service: one destination where you can enter the bet of your choice and then be immediately directed to the best odds.

How do you interpret odds ratio?

In the UK, odds are usually provided as fractions, but this is not the way that odds are usually displayed in Europe and beyond. Here the convention is to use decimal odds, which to the uninitiated usually give a better indication of the return on a bet. Here is an example:

In this particular example, the probability of the event occurring is obviously high (80% in fact). This would be a typical situation if a big team such as Manchester City was playing at home against a team from the middle of the Premier League, say Bournemouth.

In terms of fractional odds, the equation is best made by considering that if you placed a bet of £5, your reward would be £1 (plus the initial £5 of the stake): hence 1/5. In decimal odds you will see clearly that if you bet £1 then you will win £1.20.

The odds do not reflect any difference in the return itself, they are simply differing systems to tell you the same thing. At compareyourodds.com we currently list all odds in decimal format, but we will soon be offering the choice of fractional odds too, depending on the system that you prefer to use in your online sports betting approach. Either way, the best odds are the best odds, so comparing the offerings is vital.

What are the best bookies?

The simple answer here is that it depends what you are looking for. Some bookmakers will provide you with incredible sign-up offers and special offers, while others will consistently give you more competitive odds. In our experience, the best bookmakers are those which provide the widest betting markets and provide regular and proven payouts. That is why the bookmakers we list on our service are those who are the most respected and highly regulated. And remember that although sports betting should be fun, it should also be performed responsibly, so we also ensure that we only use the bookmakers which have committed to responsible gambling approaches.