How do bookmakers establish odds if sports events are unpredictable, considering the multitude of factors at play that prevent precise probability estimation?
In: Mathematics
They use statistical models. If you know that Team A won over few teams that Team B lost to you can take a good bet (pun intended) that Team A will win over Team B. Also they take into consideration that whoever win they will still make money out of it so for example if one team team win prediction is 75% they have 3:1 odds to win so bookmaker can put the odds for players like 2.5:1 so they have margin of error if anything goes wrong.
Nowadays in online betting it’s even more visible since in theory bookmakers doesn’t care who wins. He only wants to make money. So after initial odds they adjust them based on the best players are making so they (bookmakers) are always net positive.
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