How they set the odds.Fixed-odds Bookmakers have to keep the liabilities of popular sports personalities like Tiger Woods low. How or why do they do this?
Bookmakers must understand the right odds to fit the demand expected from their customers before laying the be t, or they run the risk of losses.
Sticking to the original example, if according to a Golf odds compiler, the legendary Woods is a 3/1 or 25% chance to win a golf major and the value bettors pick, David Love is a 16/1 or 5.88% for the same tournament, the bookmaker needs to adjust his odds or prices according to his targets and what his market wants. This has to be done for the book have the best theoretical chance of attracting balanced action on as many golfers in the tournament as possible. So lets look at how this is decided.
Say the tournament was expected to attract stakes of $100,000, the maximum ideal payout target be $82,000. Tiger at 3/1 would only need $21,000 staked to erode the $18,000 hold target by $2,000. The line would have to move, and that would disappoint the army of small bettors who contribute a big share of turnover.
Woods popularity with bettors is strong enough for bookmakers to expect his stakes to be around 40% of total money bet. So, an even-money quote, returning $80,000 to winning punters, is a better number for the bookie. At evens, only Wood’s regular bettors would play.
David Love’s bettors would be estimated to stake $10,000 at 16/1. Value picks can be dangerous. Offering shorter odds of 9/1, and fair value prices about the remaining players reduces the risk of steam where shrewd value bettors are followed by heat-gamblers looking to get some of the action.
These odds changes increase the chance of achieving the profit target, and the $18,000 take-out has some insurance to cover risks on future events when the odds men make the wrong call.
Without bookmakers to sell the bets, and odds compilers to make the prices, overall control of the Sportsbook’s business is reduced and the chance of costly mistakes increases.