To appreciate the Job of the Bookmaker we must first dissect the methods and criteria to which he lends himself.
He must create or compile the Odds of each and every horse race on every race card. Every single day.
This is a very difficult Job and mistakes are often made.
So in order to gain an edge when betting we need to find any faults or mistakes that may occur during the compiling process.
The complete process of compiling will be known as creating “The Book”.
This will be addressed in the following 9 stages.
Understanding the numbers is vital to anyone serious about betting to win!
This will be outlined in the following nine stages-
The predicted chance of success
Compiling the Book
Let us start with the Odds
There are two types of odds
Absolute odds and indefinite odds
To distinguish between the two-
Absolute odds are the toss of a coin is 50/50 or Evens
Therefore you have a 50% chance of it being Heads and a 50% chance of it being Tails
Now if I was to offer you 5/1 for it being Heads this would be known as indefinite odds, an enticer or a teaser if you like!
Basically all bookmakers offer indefinite odds that are unbalanced and designed to entice
This is where they incorporate the Margin/the over round / the over broke or spread
Two Sides two every coin
For every bet there is a need for two parties to have different opinions of a betting outcome
For the purpose of this exercise these will be known as
Party A. (the Bookmaker/layer. Or he who offers the odds)
Party B. (the Backer/the bettor or he who takes the odds)
There are also two sides to the actual odds
These are known as odds on and odds against
What this basically means is that if party A Offers 2/1 and Party B. Accepts those odds
Party A will have odds of 1/ 2 and Party B will have odds of 2/ 1
This works with “odds on” equations to.
The- “odds on” Wager offered by party A. Maybe 1/6
In this case party B will take the odds of 1/6 and party A would secure himself odds of 6/1 + His/hers profit Margin.
(This profit Margin is known as the over round. The over broke. The spread or just profit margin)
Now for a bookmaker to guarantee himself overall profit he must apply a simple rule known as “odds coupling.
This is always applied when compiling a book for any individual event
So realistically the odds on offer are indefinite, you would not get 1/3 for party B opposing 3/1 for party A
Basically “Odds coupling” is when the odds are slightly disproportionate to each other when compiling both sides of probability to a bet
This can easily be recognised when betting on betting exchanges where the layside may offer 5.4 and the back side may offer 4.9
(Not the same/disproportioned odds)
What this means is that if party B is getting 4/ 1 then party B must adjust his odds when compiling to incorporate a small percentage of profit for his/her book ( The over round )
This is where we need to convert the odds from fractions into percentages and then back to fractions again.
So let us say we have odds of 3/1
This tells us that there are 4 parts to this bet (3/1 is the same as 3+1 when betting)
Now what this tells us is that Party A has 3 chances in 4 of winning
And party B only has 1 chance in 4 of winning
Therefore if we convert these odds to percentages
Party A has a 75% chance of winning opposed to Party B who only has a 25% chance of winning)
Now to ensure the bookmaker or party A incorporates is over round or profit margin he must at least adjust his percentage to 76% this would give him a 1% Margin on the Spread or 76%/25%
So effectively odds of 3/1 will not be coupled with 1/ 3 when making the book. Instead the odds may appear more like this
Party B would use the odds of 2/7 instead of 1/3 because this will allow him a 77.52% profit ratio if he wins
And party B on the other side of the odds would be 3/1 allowing him a probability of 25% as a winning chance according to the odds on offer to him
As you can see Party A has incorporated this margin on just one horse if he did this in a ten horse race he would have created an over round of 25.2% this is made up of the odd 2.52% he has added to each selection by disproportioning the opposing odds
Therefore the definition of odds coupling is to disproportionate opposing odds from the layers side Party A.
Opposed to proportioned odds on the backers side /Party B
The Fractions are quite simply percentages and Decimals written in a different form
Again there are two sides to a bet
Party A.The Bookmaker/layer
Party B. The backer
If the odds were absolute or real, a table of odds would look something like this
75% chance of winning 25% chance of winning
In an odd’s on wager the tables would be the other way round
25% chance of winning 75% chance of winning
The percentages are the same as Fractions and Decimals also written in a different form
75% chance of winning 25% chance of winning
Decimal odds are a simpler way of working out the odds and don’t give you a headache every time you want to place a bet.
Do you know the difference between 2/9 and 4/7?
No? Well, not many people do. But with decimals you’d know instantly.
So, how do decimal odds work? Well, if the decimal odds are 4.4 and you place a back bet of £10 and win, your total return is £10 x 4.4 = £44.(less any commissions that may be added by the betting exchange or bookmaker)
This is equivalent to a traditional price of 7/2
The key part to remember is that decimal odds always include the unit stake – thus every price you see on Betfair will be >1.
Fractional odds represent the profit – 5/1 means you will win five pounds for every one pound staked. And odds of 5/1 will shown as 5+1 the (unit stake) thus showing 6.0 as the equivalent odds
Likewise odds of 7/2 are calculated as follows 7 divided by 2=3.5 plus the unit stake >1 now equates to 4.5
So 7/2 is 3.5 + 1 which equals 4.5
This may take some time to come to terms with but in the meantime you can go to the “Betfair” website and use there odds converter tool absolutely free
You’ll be up to par in no time!
Also once you can calculate fractions to decimals it makes working out predicted percentage much easier
Odds of 5/2 are converted to percentages as follows
5 divided by 2 =2.5
Now divide into 100 (100%)
This equals 100/2.5 = 40
Therefore 5/2 represents a predicted 40% of that bet winning if the odds are absolute or real
This is the biggest illusion when betting on horse racing
Firstly every horse in a race as some chance of winning
Therefore we must assume that all horses start off on a level playing field and thereafter a book is compiled by the odds compiler or bookmaker to create an in-balance
Some selections will be judged to have a greater chance and some to have a lesser chance of winning and therefore odds will fluctuate across the book
Shorter odds will be offered to selections that are deemed to be a better choice when predicting a winner
And longer odds for those expected to have less chance of winning
This is where the backer can obtain value in there betting!
Definition: Obtaining a better price from the odds on offer than are predicted to be correct
In simple terms if the odd on offer are 3/1 then it is predicted that the selection has a 25% chance of winning
But what if the absolute or real chance of winning was 40%
Then the odds should actually be 5/2
(5 divided by 2 =2.5) (100% divided by 2.5 =40%)
If this was the case you would achieve odds of 3/1 which would return 3 times the stake placed from a bet that should only be returning 2.5 times your stake at 5/2
Also you have got higher odds for a 40% probability of winning opposed to the odds compilers prediction being that the selection of 3/1 should only give a winning chance of 25%
So therefore in this case providing the selection goes on to win
You would have gained some value!
When a backer chooses his or hers selections he/she usually does this by reading or studying various items of form
Or a system based on some criteria
Or a tipster
What he/she often fails to account for when placing bets are-
The over round/over broke/ profit margins that are incorporated in the odds on offer or the spread as it is known
The following articles and example will simplify the structure of the book to enable the understanding of absolute or real percentages of the “Book”
The predicted chance of success
A great way evaluate your predicted chance of achieving a winning outcome is to use the following rule.
The rule is-
“Whatever you think, think the opposite”
Example of this rule is as follows-
If you are offered odds of 3/1 or 4.0 this means that you have a 1 in 4 chance of success provided that the odds are absolute
This equates to you having a 25% chance of success.
Apply the rule and. Think the opposite!
This means you have a 75% chance of losing
(which does not include the over round margin or spread)
All of a sudden the bet does not look so appealing, this is where we have to use our own judgement based on fact, form and analysis to allow you to decide whether or not you think the chance of winning is greater than predicted, for that selection
Compiling and creating “the book”
As a bookmaker.A knowledge of percentages is vital and for many learning these numbers will become second nature
In order for a bookmaker to secure a profit from the book the percentages for all runners combined must together equate to a number greater than 100%
Occasionally a bookmaker will compile or adjust odds to make the book under round or over broke in order to attract business (All runners combined equal less than 100%)
In doing so he puts is book at risk of potentially making a loss
However in most circumstance the book is over round
Example of this is shown in the following race compilation-
This is taken from a real race from Friday October 7th 2011
The 32 RedPoker Median Auction Stake
Odds for each selection
Odds converted to percentage
True Odds all 9/1
True chance of winning
100% divide by 9+1=10%
9/1 true odds
10% average chance of winning
Statement of Intent
The Cornish Cowboy
True totals are ten horses with and average 10% per horse equal to-
131% – 100% = 31% as the Over round or Spread or Profit Margin
Betting forecast- Evs Chelsea Mick, 3/1 Oblitereight, 13/2 Mr Fong, 7/1 Elmora, 10/1 Hi There, 12/1 Statementofintent, 25/1 King’s Future, 25/1 Path Finder, 25/1 Thecornishcowboy, 50/1 Tresabella
Thus- the over round here is 31% is achieved by the bookmaker for this race
In theory a backer who staked according to the percentage on every selection would stake 131 units. However whatever horse wins will only result in 100 units being returned. Therefore the bookmaker would make 31 units profit or 31%
This is generally how a book would look with an over round included in the Odds or prices!