eli5: How do professional betting houses determine the gambling odds for games and fights?

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Im not a gambler so this is foreign to me. But i’ve always been fascinated with the business of setting odds. Is this pure subjective from professional odd setters or is there complex math attached to each odds?

In: Mathematics

3 Answers

Anonymous 0 Comments

The casino makes money on either outcome. The odds influence betting behaviour. If they want more people to bet on one outcome, they’ll shift the odds to encourage that bet. At the end of the day they just need to make sure they collect enough bets to profit regardless of who wins.

Like if the casino believes that a fight is truly 50/50, they’ll offer slightly less than 2:1 odds on each fighter. They assume half of people will bet on each fighter, and the ones who win their bet get a bit less than double their money. That “bit less than double” is the casino’s profit.

Anonymous 0 Comments

The goal of the spread is to get people betting one both sides with some room it the middle for the house to make a profit.

Anonymous 0 Comments

The (overly simplified) goal of every sportsbook is to ensure that 50% of people bet on one side and 50% of people bet on the other side. To do this they have professional handicappers who set their odds and if things slide out of balance they adjust the odds to make the other side look more attractive and get more bets.

They set up the payouts to ensure that no matter what team wins, they make a profit.