author: andriev   20 February 2019Print page

Where do odds come from?

Bookmaking industry is currently at its all-time high. The technology allowed bookies to bring out the most potential. From old school oddsmakers to the high-tech complicated software and scripts, bookmakers have always found a way to generate their odds. How they actually do it compared to the old days?

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How the odds come about?Oddsmaking nowadaysOutsourcingFuture of oddsmaking
How the odds come about?

The odds are designed in a way to attracts the most action on both sides of the bet. The ultimate goal is to have a perfect equal volume on both sides, however, that is never the case. Additionally, books factor in a 5-10% margin, that ensures their profits. Basically saying, you can look at the oddsmakers as risk management professionals and not just sports predictors.

All of the above has been laid into the foundation since the very first day of bookmaking craft. The only difference was that back in a day, they did not have any computer or advanced software. Everything was done manually by hand or generated through a thoughtful brainstorming process.

Before the Internet breakout bookmaking companies used to base their predictions on the power ranking. It was a complete mystery how accurate they were, however, it seems like back then they were not much different from those used nowadays. Basically, a power ranking is a combination of individual player performance, schedule, and team performance factored into and balanced with traditional sports statistics and other intangible factors. After that, when there's a time to post the odds, bookies usually add recent injury reports and a bit cosmetic changes to finalise their first numbers. Then, everything is in the hands of punters, as the odds are getting shifted based on the volume of bets received. Overall, the only difference is that back then, they used to rely more on their personal experience and feelings, as opposed to nowadays' data and stats.
Oddsmaking nowadays

Modern oddsmaking involves a huge share of computer-based work. The process became a much-complicated one involving both mathematicians and statisticians processing centuries of data and altering it with the ongoing trends.

As the industry attracts more and more people, the need for a more accurate product gets bigger than ever. More and more specialists are getting involved in creating those numbers. Well, do the modern oddsmakers still use the power ranking? Yes, however, it looks way more sophisticated than it used to. The data taking into the formula is enormous. The process of creating odds became for quantifiable and precise. Nevertheless, the industry still trying to sharp the process by diversifying. What it means, bookies hire more people from completely different fields in order to shape the best and most efficient odds.

Another modern trend in nowadays' oddsmaking is outsourcing. The process of creating the odds is quite complicated, time-consuming and requires sufficient funding. Most of the bookmakers either do not have it or do not want to spend much. The reason for that is increasing costs. By overspending or just spending the needed amount on oddsmaking operators would need to impose a higher margin, as it would require such a measure to stay profitable on the long-run. This will lead to low customer satisfaction and so on.

Because of this, many betting operators are getting the odds from other companies that specialise on oddsmaking. This not only saves time but also allows room for a better marketing campaign that bookies usually opt-in to.

Though, do not get it twisted. Every top online bookmaker most definitely has a person or even a whole department of them. Even if they outsource the data, someone still has to approve the final decision and/or make a call.

It is hard to see which bookmaker is copying the odds and which creates them in-house. The reason for that is that odds are considered a trade secret and are not up for disclosure. However, there is a way to see which company has put in more work by monitoring their offered lines and/or odds themselves. If you see that the sportsbook has a unique line or even the whole market, chances are that it was created by their own oddsmakers.
Future of oddsmaking

It won't be much of a surprise if we tell you that the future of oddsmaking is in the hands of automated software and complicated algorithms. As time goes, the industry becomes more computerised and takes a large share of the workload off statisticians and handicappers. Thanks to technological development, the role of the human element decreases, relying more on AI and algorithms.

On the other side, bookmakers are still hiring lots of sharp bettors to make their odds even better. Statistics show that in recent years as many statisticians got a big win in sports betting as professional bettors did. Top online betting companies know this and willingly take such people on board. So, if you are a sharp punter, one day you might find yourself being on the other side of the odds.

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