Before computerized analytical models became common place how did bookies set odds.
Was it just through a hell of a lot of mathematics and statistics or was it just more of a guestimate as to what odds would make the bookmaker a profit in the long run?
In: 22
Many many years ago I did some sports betting and came out ahead, with zero interest or knowledge in the actual games, because it was a time when there were some ways it could be exploited. We’re talking pay phones here. But I had almost no cash and I was risk averse and the industry was consolidating, so I quit. Anyhow, the old days:
The Yankees will play the Padres. You want to be a bookie so you take bets, even bets. Who is going to win? Everybody bets on the Yankees because there is zero chance the Pads will win. Strangers are begging you to take their $500k bets. The score is 12-5, Yankees. The only loser is you.
So you instead use a point spread. You guess expect it’ll be something like 12-5 so you offer it with points. You start with Yankees by 6.5. Bets roll in. You don’t care about what the actual outcome is, you just want the dollars on each side to be roughly equal so you don’t lose money. If more money gets put on the Padres, you drop the spread to get it balanced. You’re a bookie, you take bets in twenty different things, you’re not going to try to outsmart your bettors by predicting the outcome. You make your living off the juice.
There used to be more variation in point spreads between bookies, and over time. When I dabbled it was almost academic. Had I tried placing large bets I would have been treated like a card counter in Vegas back in the day: banned for sure, my money kept most likely, roughed up potentially.
Many many years ago I did some sports betting and came out ahead, with zero interest or knowledge in the actual games, because it was a time when there were some ways it could be exploited. We’re talking pay phones here. But I had almost no cash and I was risk averse and the industry was consolidating, so I quit. Anyhow, the old days:
The Yankees will play the Padres. You want to be a bookie so you take bets, even bets. Who is going to win? Everybody bets on the Yankees because there is zero chance the Pads will win. Strangers are begging you to take their $500k bets. The score is 12-5, Yankees. The only loser is you.
So you instead use a point spread. You guess expect it’ll be something like 12-5 so you offer it with points. You start with Yankees by 6.5. Bets roll in. You don’t care about what the actual outcome is, you just want the dollars on each side to be roughly equal so you don’t lose money. If more money gets put on the Padres, you drop the spread to get it balanced. You’re a bookie, you take bets in twenty different things, you’re not going to try to outsmart your bettors by predicting the outcome. You make your living off the juice.
There used to be more variation in point spreads between bookies, and over time. When I dabbled it was almost academic. Had I tried placing large bets I would have been treated like a card counter in Vegas back in the day: banned for sure, my money kept most likely, roughed up potentially.
Many many years ago I did some sports betting and came out ahead, with zero interest or knowledge in the actual games, because it was a time when there were some ways it could be exploited. We’re talking pay phones here. But I had almost no cash and I was risk averse and the industry was consolidating, so I quit. Anyhow, the old days:
The Yankees will play the Padres. You want to be a bookie so you take bets, even bets. Who is going to win? Everybody bets on the Yankees because there is zero chance the Pads will win. Strangers are begging you to take their $500k bets. The score is 12-5, Yankees. The only loser is you.
So you instead use a point spread. You guess expect it’ll be something like 12-5 so you offer it with points. You start with Yankees by 6.5. Bets roll in. You don’t care about what the actual outcome is, you just want the dollars on each side to be roughly equal so you don’t lose money. If more money gets put on the Padres, you drop the spread to get it balanced. You’re a bookie, you take bets in twenty different things, you’re not going to try to outsmart your bettors by predicting the outcome. You make your living off the juice.
There used to be more variation in point spreads between bookies, and over time. When I dabbled it was almost academic. Had I tried placing large bets I would have been treated like a card counter in Vegas back in the day: banned for sure, my money kept most likely, roughed up potentially.
The same way people did anything before computers – study, experience, doing the work by hand. Bookies used their knowledge of whatever they were taking bets on to decide where to place the line, and move it if it could be improved.
Whatever the game, bookies have always had more experience than bettors, whether that’s with sabermetrics or just eyes on the game.
The same way people did anything before computers – study, experience, doing the work by hand. Bookies used their knowledge of whatever they were taking bets on to decide where to place the line, and move it if it could be improved.
Whatever the game, bookies have always had more experience than bettors, whether that’s with sabermetrics or just eyes on the game.
The same way people did anything before computers – study, experience, doing the work by hand. Bookies used their knowledge of whatever they were taking bets on to decide where to place the line, and move it if it could be improved.
Whatever the game, bookies have always had more experience than bettors, whether that’s with sabermetrics or just eyes on the game.
In horse racing for example, the “juice” is about 18% (more or less depending on certain factors.)
So the bookie takes a $100 bet, but only $82 goes into the “payout pool.” The $18 is divided in many ways, again depending, but the bookie gets to keep some of it. That’s his income.
Now all he’s gotta do is make sure his books “balance” so that no matter the outcome, he doesn’t lose. This is the same thing as hedging. If he does this right, he breaks even on the bets, and keeps his portion of the “juice.”
In a simplified example, it’s a two horse race, Secretariat vs. Sham.
The bets come in. $1000 on Secretariat. $500 on Sham. That’s $1500 altogether. For simplicity’s sake, let’s say the “juice” is only 10%. The bookie keeps $150 for himself. Now $900 is in the Secretariat pool and $450 in the Sham pool. Secretariat’s odds are 1/2. Sham’s odds are 2/1.
As more money comes in, the equation changes.
Somebody puts $500 on Sham. Now it’s $1000 bet on each, ($900 after the “juice”) and each horse is 1/1 or “even money.”
In horse racing for example, the “juice” is about 18% (more or less depending on certain factors.)
So the bookie takes a $100 bet, but only $82 goes into the “payout pool.” The $18 is divided in many ways, again depending, but the bookie gets to keep some of it. That’s his income.
Now all he’s gotta do is make sure his books “balance” so that no matter the outcome, he doesn’t lose. This is the same thing as hedging. If he does this right, he breaks even on the bets, and keeps his portion of the “juice.”
In a simplified example, it’s a two horse race, Secretariat vs. Sham.
The bets come in. $1000 on Secretariat. $500 on Sham. That’s $1500 altogether. For simplicity’s sake, let’s say the “juice” is only 10%. The bookie keeps $150 for himself. Now $900 is in the Secretariat pool and $450 in the Sham pool. Secretariat’s odds are 1/2. Sham’s odds are 2/1.
As more money comes in, the equation changes.
Somebody puts $500 on Sham. Now it’s $1000 bet on each, ($900 after the “juice”) and each horse is 1/1 or “even money.”
In horse racing for example, the “juice” is about 18% (more or less depending on certain factors.)
So the bookie takes a $100 bet, but only $82 goes into the “payout pool.” The $18 is divided in many ways, again depending, but the bookie gets to keep some of it. That’s his income.
Now all he’s gotta do is make sure his books “balance” so that no matter the outcome, he doesn’t lose. This is the same thing as hedging. If he does this right, he breaks even on the bets, and keeps his portion of the “juice.”
In a simplified example, it’s a two horse race, Secretariat vs. Sham.
The bets come in. $1000 on Secretariat. $500 on Sham. That’s $1500 altogether. For simplicity’s sake, let’s say the “juice” is only 10%. The bookie keeps $150 for himself. Now $900 is in the Secretariat pool and $450 in the Sham pool. Secretariat’s odds are 1/2. Sham’s odds are 2/1.
As more money comes in, the equation changes.
Somebody puts $500 on Sham. Now it’s $1000 bet on each, ($900 after the “juice”) and each horse is 1/1 or “even money.”
Bookies set odds by trying to get equal $ wagered on either outcome. They make their money in the “juice”, not by being on the right side of the bet. If they set odds right, money falls evenly on both sides
Latest Answers