The Definitive Art of Bookmaking and Odds Compiling

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 Odds

The Fractions

The Percentages

The Decimals

The probability

The value

The Margins

The predicted chance of success

Compiling the Book

Stage 1

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)

And

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

Then

Party A will have odds of 1/ 2 and Party B will have odds of 2/ 1

This works with “odds on” equations to.

For example-

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.

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

Stage 2

The Fractions

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

Bookmaker Backer

1/3 3/1

75% chance of winning 25% chance of winning

In an odd’s on wager the tables would be the other way round

Bookmaker Backer

3/1 1/3

25% chance of winning 75% chance of winning

Stage 3

The percentages

The percentages are the same as Fractions and Decimals also written in a different form

Bookmaker Backer

75% chance of winning 25% chance of winning

1/3 3/1

Etc…

Stage 4

The Decimals

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.

Example-

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

Example-

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

Stage 5

The Probabilities

This is the biggest illusion when betting on horse racing

Why?

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!

Stage 6

Value

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!

Stage 7

The Margins

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”

Stage 8

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

Stage 9

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

Wolverhampton 18.10

The 32 RedPoker Median Auction Stake

Odds for each selection

Selection

Odds converted to percentage

True Odds all 9/1

True chance of winning

100% divide by 9+1=10%

Evens

Chelsea Mick

50%

9/1 true odds

10% average chance of winning

3/1

Oblitereight

25%

13/2

Mr Fong

13.30%

7/1

Elmora

12.50%

10/1

Hi There

9.10%

12/1

Statement of Intent

7.70%

25/1

Kings Future

3.80%

25/1

Path Finder

3.80%

25/1

The Cornish Cowboy

3.80%

50/1

Tresabella

2.00%

Totals=131%

True totals are ten horses with and average 10% per horse equal to-

100%

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!

Las Vegas Odds & Ends

The Las Vegas Hilton SuperBook again paces the pack by posting the first lines on over/under season win totals for all NBA teams.

The popular SuperBook proposition gives players a chance to wager on how many wins a particular team will have.

Defending champ San Antonio and Miami have the highest expectations with 58 1/2 wins apiece, followed by Indiana at 54 1/2 and Houston and Dallas at 53 1/2.

The second-year Charlotte Bobcats bring up the rear with 21 1/2 victories.

The Lakers, a popular team in the Vegas Valley, are 42 1/2 with the Chicago Bulls and Minnesota Timberwolves while their Los Angeles neighbors, the Clippers, are at 40 1/2.

*****

Bourbon Street has shut its doors and rumors insist the Tropicana also is on the auction block and that this is the last football season for the Imperial Palace.

Harrah’s is supposedly interested in the latter two to add to its growing kingdom of properties.

Look for a Leroy’s Sports Book to go into the Las Vegas Club, which is being kept open by employeees now that the Barrick Group has

gone bust.

*****

The Clark County Commission recently approved plans for Olympia Gaming to enter the Las Vegas Market.

Plans call for Olympia’s $750 million Southern Highland”s Casino-Resort on Las Vegad Blvd. South and St. Rose Parkway.

Having an ultimate build-out in the $2 billion range, it is the South Strip’s most ambitious property to date.

Eventually, it promises to be a mixed-use destination luxury resort that has the amenities and attractions of a major Strip resort.

*****

Caesars Palace Race and Sports Director Chuck Esposito leads the Gaming Today newspaper’s “Battle of the Bookies” NFL Players competition with a 68-33 mark and appears to be running away with the contest.

The closest pursuers are Mike Hendrie of Paris Las Vegas and the Las Vegas Hilton’s Jeff Sherman and the Golden Nugget Laughlin’s Steve Harvey with 59-42.

*****

Caesars Palace, Bally’s, Paris, the Flamingo and Reno Hilton have Vitali Klitschko as a minus $4.30 faviorte over plus $3.30 Hasim Rahman in their Caesars Palace WBC heavyweight boxing match Nov. 12.

The “will go” eight full rounds is minus $1.10 and “won’t go” is minus $1.20.

Klitschko is 8/5 to win on a decision and Rahman is 8/1. Klitschko is minus $1.80 to win by a knockout and Rahman is 5/1.

The draw proposition is 15/1.

Bernard Hopkins is a slight minus $1.20 favorite over Jermain Taylor (minus $1.10) in their WBC/IBF/WBO Las Vegas middleweight title bout Dec. 3.

The fight is scheduled for 12 rounds.

*****

Las Vegas oddsmakers obviously consider the Chicago White Sox one-shot wonders.

The Las Vegas Hilton has them at 15/1 to repeat as World Series champs and the Caesars Palace family lists them at 20/1.

Favorites are the St. Louis Cardinals and New York Yankees. The Hilton’s current odds have the Cardinals at 5/1 and Caesars Palace has them at 3/1. The Yankees are 5/1 at the Hilton and 4/1 at Caesars.

There’s a big gap between the properties when it comes to the Cleveland Indians. They’re 15/1 at the independent Hilton and 5/1 at Caesars establishments.

The Chicago Cubs, perrenial action-attractors, are 20/1 at the two properties and the local favorite Los Angeles Dodgers are 30/1 at the Hilton and 40/1 at the Caesars group books.

The Los Angeles Angels are 10/1 at the SuperBook and 8/1 at Caesars bet shops.

Boston is 7-1 and 6-1 respectively.

Atlanta’s Braves are 12/1 at the Hilton and 7/1 at Caesars properties.

Long shots are the Kansas City Royals at 500/1 and 300/1.