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What are bookmaker odds?
Bookmaker odds show the likelihood of different outcomes in sports events. They help determine the potential payout for bettors and show how likely something is to happen, such as a team winning or a match ending in a draw.
Odds come in different formats, such as decimal, fractional, and American, depending on the region or platform. They are designed to balance the risk and reward for both the bettor and the bookmaker.
Types of odds formats
Bookmaker odds come in different formats, each designed to show the likelihood of an outcome and calculate potential payouts in a way that suits regional preferences. The three main formats which are decimal, fractional, and American are commonly used across sports betting platforms. Understanding these formats is key to interpreting odds and making better betting decisions. Below are the main types of odds formats and their role in sports betting.
Decimal odds
Decimal odds are shown as a decimal number (e.g., 2.50). They show the total payout per unit staked, including the original stake. For example, a€10 bet at 2.50 odds returns €25 (£15 profit +€10 stake). This format is most commonly used in Europe, Australia, and Canada because it’s simple and easy to understand.
Fractional odds
Fractional odds are shown as fractions (e.g., 5/2). They represent the potential profit for a given stake. For example, a 5/2 bet means a€2 stake will return€5 in profit, plus the original€2 stake. This format is popular in the UK and Ireland, especially for horse racing and other traditional betting markets.
American odds
American odds are shown as either positive or negative numbers (e.g., +200 or -150). Positive odds (+200) show how much profit you can make on a $100 stake ($200 profit, $300 total return), while negative odds (-150) show how much you need to bet to make $100 profit ($150 stake for $100 profit). This format is most commonly used in the US, especially for sports like American football and basketball
Odds calculation and probability
Understanding odds calculation and probability is key to interpreting bookmaker odds. Bookmakers use statistical models and market data to set odds and add a margin to ensure they remain profitable. The implied probability, which comes from the odds, shows the perceived chance of an outcome, adjusted for the bookmaker’s margin.
Implied probability
Implied probability shows the chance of an outcome happening, based on the odds.
– For decimal odds, it’s calculated as (1 / odds) × 100 (e.g., 2.00 odds = 50% chance).
– For fractional odds, it’s the denominator divided by (numerator + denominator) × 100 (e.g., 1/1 = 50%).
– For American odds, positive and negative odds are calculated differently:
– Positive odds: (+200 = 100 / (200 + 100) = 33.33%).
– Negative odds: (-150 = 150 / (150 + 100) = 60%).
True probability
True probability is the actual chance of an event happening, based on data like team form or player performance, before bookmakers adjust the odds. Bookmakers add their margin, meaning the implied probability is usually slightly higher than the true probability.
Bookmaker margin
The bookmaker margin is the built-in profit that ensures the bookmaker earns revenue no matter the outcome. It’s calculated by adding up the implied probabilities for all possible outcomes and subtracting 100% (e.g., in a two-outcome event with 52% and 52% implied probabilities, the margin is 4%).
Odds conversion
Odds conversion is the process of changing odds from one format to another (decimal, fractional, or American) to compare or standardise probabilities. For example, decimal odds of 2.00 convert to fractional odds of 1/1 and American odds of +100.
Factors influencing odds
Understanding what affects odds is important for bettors and analysts using platforms like Sportmonks, which provides odds data for betting tools and market analysis. Below are the key factors that influence odds
Team and player performance
Bookmakers use data on recent form, past results, head-to-head matchups, and individual player stats (e.g., goals, injuries) to estimate the chances of different outcomes. Sportmonks’ API includes this performance data, which bookmakers use to set initial odds.
Market demand
The number and type of bets placed on certain outcomes can influence odds as bookmakers try to balance their books. For instance, if many people bet on a favourite, the odds for that team may shorten.
External factors
Things like weather, the venue, or team news (e.g., injuries or changes in the lineup) can affect a team’s performance, and thus the odds. Bookmakers adjust odds based on these updates, which are reflected in real-time odds feeds from Sportmonks’ API.
Public sentiment
Bettors’ perceptions or biases, such as favouring popular teams, can impact the odds. These betting patterns can lead to shifts in odds.
Payouts and returns
Payouts and returns refer to how much money you get from a winning bet. This amount is calculated based on your stake (the amount you bet) and the bookmaker’s odds. Each odds format uses its own method to work out the total return or profit. Below are key terms related to payouts and returns:
Total return
This is the full amount you receive from a winning bet, including both the original stake and the profit. For decimal odds, it’s calculated as stake × odds (e.g., a€10 bet at 2.50 odds =€25 total return).
Profit
This is the net gain from a winning bet, excluding the original stake. For fractional odds, profit is stake × (numerator/denominator) (e.g., a€10 bet at 5/2 odds =€25 profit,€35 total return).
Stake
The stake is the amount of money you bet. It is multiplied by the odds to work out the return and is included with the profit on a winning bet.
Odds movement and market dynamics
Odds movement and market dynamics refer to how bookmaker odds change over time, influenced by betting activity, live match events, and external factors. These changes show the shifting balance between bookmaker risk and bettor behaviour, making them important for understanding betting markets. Below are key terms related to odds movement and market dynamics:
Odds movement
Odds movement is when bookmakers adjust the odds based on new information or betting patterns. For example, if many bets are placed on a favourite, its odds may shorten (decrease).
Opening odds
Opening odds are the first odds set by bookmakers before significant betting begins. They are based on statistical models and team data. These odds serve as a starting point, and Sportmonks’ API provides opening odds for pre-match analysis.
Closing odds
Closing odds are the final odds offered just before a match starts. They reflect all betting activity and adjustments made over time.
In-play odds
In-play odds are updated during a match, based on live events such as goals, red cards, or changes in momentum. Sportmonks’ API provides in-play odds for dynamic betting and live analytics.
Betting volume
Betting volume refers to the total amount of money wagered on a specific outcome or market. If one outcome attracts a lot of bets, bookmakers may adjust the odds to balance their risk.
Market liquidity
Market liquidity refers to how easy it is to place bets in a market and the availability of betting options. High liquidity markets, like major football leagues, tend to have more stable odds.
What is the Sportmonks value bet model?
The Sportmonks Value Bet model is a tool within our Predictions API that assists bettors in finding value bets. A value bet occurs when the odds offered by a bookmaker imply a lower probability than the bettor’s estimated true probability. This model analyses historical odds data and market trends to calculate fair odds, then compares these to the odds offered by various bookmakers to highlight opportunities where the offered odds are more favorable.
How does it work?
The model identifies specific value bets by providing details such as the type of bet (e.g., home, draw, away), the bookmaker offering the best odds, and the specific odds. It updates every 10 minutes until the match begins, ensuring timely information. Additionally, it includes a stake feature to help manage betting risk, making it easier for bettors to make informed decisions.
Why it matters
By leveraging this model, bettors can potentially improve their betting strategies, focusing on opportunities where the odds offer better value, which could lead to long-term profitability.
Want to try out Sportmonks API to build an efficient sports betting platform? Head over to MySportmonks to give it a whirl.
Faqs about bookmaker odds
