Beat The Bookies By Knowing Secret Of Odds
Estimated Reading Time: 35 minutes
You Can Beat the Bookies by knowing Sportsbook Secrets Of Odds and implementing three Advantage Plays based on Mathematical logics of Positive Expected Value!!
We Cover the Following Subjects in this “Beat The Bookies" Guide;
- Can you beat the bookies?
- How Bookmakers Drive Revenue Growth (Soft Bookies & Sharp Bookies)
- How Bookmakers Manage Profit Improvement
- How To Beat The Bookies: Sure Opportunities Of 3 Sports Advantage Plays
- 1. Can you beat the bookies?
- 2. 1) How Bookmakers Drive Revenue Growth (Soft Bookies & Sharp Bookies)
- 3. 2) How Bookmakers Manage Profit Improvement
- 4. How To Beat The Bookies: 3 Sports Advantage Plays
Can you beat the bookies?
Know Your Enemy
You can beat the bookies by knowing how your enemy makes money as the ancient Chinese strategist Sun Tzu said in his famous military treatise Art of War. Remember, under Fixed Odds system, you face Zero Sum game, means if you win, then bookies lose, and vice versa. Therefore the bookmaker is your Enemy. Allow me to quote his saying;
If you know neither the enemy nor yourself, you will succumb in every battle
So, I would like to emphasize the importance of knowing not only your enemy but also yourself, means which edge you get over the bookies is critical. So, see the weapon enabling you to beat the bookies in the next section.
How to beat the bookies sports betting & horse racing?
If you keep betting sports or horse racing based on your hunch, you may have very little chance to beat the bookies long-term. We never gamble, means we don’t count on luck or chance at all. Instead, we use Advantage Plays which gives us the mathematical edge over the bookmakers by identifying Value expressed in EV (Expected Value). Positive EV will bring you profit in long-term without fail. That’s how we beat the bookies.
With that said, one of our policies is “Betting On Luck Is For Losers, Stop Gambling But Bet on Only +EV To Win Reliably“. It is effectively our way to promote Responsible Gambling under the regulation, and we strongly support GamCare & GamStop being explained in about us.
Knowing the bookmaker’s profit model is one of our basic tactics to find Value Bet based on Advantage Play concept.
BTW, we Global Extra Money (GEM) would like all visitors from anywhere in the world to enjoy our methods, thus we have issued :
Know Bookmaker – 2 Criteria
- How Bookies Drive Revenue Growth (means the growth of sales – the number at the top of their Income Statement)
- How Bookies Manage Profit Improvement (means the final profit – the bottom line number in their Income Statement)
1) How Bookmakers Drive Revenue Growth (Soft Bookies & Sharp Bookies)
Broadly speaking, there are two different approaches as follows;
Promotion Driven Model – Employed by “Soft Bookies"
Majority of the on-line bookmakers adapt this model. They attract new customers and develop loyalty of existing customers using heavy sign-up & reload bonuses. Needless to say, it will incur heavy marketing cost. Generally speaking, their odds are not competitive but slow to adjust to the rapid change in the market. This creates huge market inefficiencies Especially In Contrast With Sharp Bookies as explained next. They try to mitigate these issues with complicated and restrictive terms & conditions. This activities end up with eliminating the sharp punters via restricting their account often called “Gubbing" in matched betting category. You may see the examples of this type of bookmakers in List of 35 World Worst Betting Sites That Quickly Restrict Your Account (all of them are big names in the industry).
Reduced Margin Pricing Model – Employed by “Sharp Bookies"
There are a few bookmakers that have taken completely different approach from the above promotion model. It can be described as Reduced Margin Pricing model or Sharp Bookmakers. Pinnacle Pinnacle is the forerunner of this model and the other big example is SBOBet. What Pinnacle has done is that they built what they might spend on bonus incentives directly into their odds. And they reduced their own margin (so called over-round that will be explained detail later) or reduced juice. They aim to drive profit from lower margins but a far higher turnover. Under this model, the sharp punters / price traders are not their threats but good helper to shape their odds / lines. Therefore they officially declare Welcome Professional without single account restriction. For the detail Pinnacle Business Model, see Pinnacle Sports Review.
Soft & Sharp Bookmakers
Let me quickly summarize the characteristics of Soft & Sharp bookies as;
- Soft bookies: Targeting Casual Punters – Run a lot of promotion / Odds adjustment is relatively slow / Impose account restriction (gubbing)
- Sharp bookies: Targeting Professional Punters – Highly competitive odds / High staking limit / Never impose account restriction
2) How Bookmakers Manage Profit Improvement
Be noted that when it comes to the profit model, both Profit Driven & Reduced Margin Pricing model bookmakers apply the same approach as long as they use Fixed Odds System.
How Betting Industry (Fixed Odds System) Works
Firstly, let me talk about how betting market (a.k.a. Fixed Odds system) works. The general role of the bookmaker is to act as a market maker for sports wagers, most of which have a binary outcome: a team either wins or loses. The bookmaker accepts both wagers, and maintains a spread which will ensure a profit regardless of the outcome of the wager. Fixed odds betting is all about probability. For casino games like dice rolling, the probability function that describes the chance of one or another result occurring can be calculated perfectly by mathematical principle. The skill of a person hardly comes in the play. In sports prediction, by contrast, the probability function can only be estimated by observation of a team / player’s past performance, and other influencing factors. Thus, fair odds in sports are merely estimations of the expected probability (ie implied probability), or chance, of something occurring, rather than exact calculations.
Odds = Implied Probability
For example, in Spain v Turkey football game, if estimated that Spain have an 80% chance of victory, the size of the stake for Spain win would be 4 times that for the stake for Spain not to win (or 80% / 20%). If Spain win, the bettor backing Spain would win £20 for an £80 stake. In Spain fail to win, the bettor backing Spain not to win would return a profit of £80 from a £20 stake. Consequently, the odds for an Spain victory would be 1/4, and 4/1 for Spain not to win (Turkey win). The expected probability of all possible betting outcomes will total 100%. “Odds" is really just a betting term for Implied Probability. To be specific, odds is a Market Price of Odds offered by bookmaker and not reflecting True Probability, which you will understand clearly later. Bookmakers have their own opinion about what the fair odds for each event should be. If they are wrong, and the punter spots the mistake, this is where the profit can be made.
Bookies Odds Not Necessarily Reflect True Probability – Opportunity
Quick wrap up. In sports betting, punters compete bookies with not exact probability math like Casino where house never looses but merely estimated probability. The bookies do not necessarily have edge over seasoned punters for the estimated probability, and most importantly bookies’ odds often don’t reflect their best estimate which we discuss later. Therefore there are opportunities you can beat the bookies. BTW, I said house never looses for casino, yes, that’s correct however, once the bonus comes in, we can shift their edge to us. For this particular point, go Casino Bonus Hunting Guide if you’re interested.
Bookmaker Profit Model
Bookmakers, who set the odds, are not doing charitable business but setting up a mechanics to make money. Those odds contain an in-built advantage for the bookmaker such that if the punter bets blindly or randomly, he will surely lose over the long term. It’s just as he would at any casino roulette, blackjack & craps where simple laws of probability govern the outcome of games. This advantage is called over-round. The similar concept is referred to as vigorish or juice, and in casino it is understood as House-edge as briefly said before. (You may also want to read How To Beat Online Casino Bonus Strategies which gives you better insight on the casino house edge comparing with the over-round. The reason why I introduce these casino documents is that understanding casino house edge will help you realize the huge value opportunities of sports betting. Honestly, you can’t beat casino without bonus or special skill like card counting.)
Over-round = Bookies’ Profit Margin
Over-round is, in short, bookies’ commission or profit and is difficult to overcome. Conversely Under-round is the condition punter can take advantage (this is the profit source for Sports Arbitrage). Let me use the example of Football match. Say there is a big match El Clasico that is Barcelona vs Real Madrid being held in Camp Nou (Barcelona’s home ground).
Bet365 shows the odds (I’m using Decimal Odds format because it’s the easiest way to understand how it works) as;
- Barcelona (Home) Win 1.8
- Draw 3.5
- Real Madrid (Away) Win 4.5
Implied probability is a conversion of odds into a percentage - whilst taking into account the bookmakers edge - and eliminates the bookmakers edge to express the true odds of an event occurring.
The implied probability of an event will always add up to over 100% under normal circumstance.
Odds Conversion Formula Into Probability
Let's examine. We use the below simple formula to convert the odds into probability;
Probability Of Occurrence (%) = 1/decimal odds x 100
- Barcelona (Home) win probability = 1/1.8 x 100 = 55.6%
- Draw probability = 1/3.5 x 100 = 28.6%
- Real Madrid (Away) win probability = 1/4.5 = 22.2%
Simply put, if Bet365 received stakes from punters in the same proportion to his book, they would bring in 106.4 units. But only ever have to pay out a maximum of 100 units, meaning that they have made themselves a profit of 6.4 units. This is how bookmaker makes money with built-in over-round.
BTW, the above Bet365 is my fictional odds for the explanation. In the real world, Bet365 provides competitive odds means their margin (means over-round %) should be lower. Coupled with their continuous tasty promotional activities, you can profit thousands of €/£/$ every month with 100% risk free with various techniques. If you're interested read 3 Proven Methods To Lock-In Massive Profits from Bet365 Promotion.
Summary of Profit Model & Risk Management
Given the popular misconception that bookies make a lot of effort to speculate the outcome of the game accurately to win over bettors, let me reiterate that, they basically don't care the final outcome of the event. Because;
- They use Over-round to make money on their wagers regardless of the outcome.
- They focus on Balancing The Book to see the same amount of money (risk) on both sides of a bet outcome.
BTW, you may wonder how they balance their book. They adjust their odds for an event over time. If a big weight of money comes in on a player, team or horse, the bookmaker is obliged to shorten the odds and control their liabilities. In order to balance the bets amount on both side and maintain interest on the event, the bookies might then push up the odds on the opposing player or team to attract equal action on each side of an event. That’s why odds are not static but fluctuating so much as a result of bookies’ constant effort to balance their books to ensure they keep an over-round present. In the above example, if Barcelona win is heavily backed, you will see the odds drop to 1.65 (60.6%) whilst the odds on Real Madrid win are pushed out to 5.5 (18.2%) to attract more money in order to balance the books. Under this scenario, the over-round would have increased to 7.4% (60.6% + 28.6% + 18.2%).
The Closer To The Event, The More Odds Move
You may observe that the closer to the game start, the more ‘fluid’ the odds become. Because salient information such as team news becomes public knowledge, and this then has a knock-on effect with bettors’ opinions being confirmed or changed on the outcome of the match in question. Thus, the odds tend to change more as the start of the match gets nearer and nearer, this is all the tactics of the bookies. So, the adjusting odds is their marketing & financial tactics to balance out the book to secure over round. Another technique they use is a point spread. Some may believe that these odds creators are attempting to be prognosticators of sporting events. However, the reality is that a point spread is set to attract action (bets) on both sides of the game, allowing the house to collect its over-round, simple as that.
Basically Similar Method
Even after such adjustment, there are usually still little unbalanced, which should be an acceptable level of risk and the only gamble bookmakers take. Surely, each sport is different, but fundamentally bookmaking methods are always the same. And bookmakers make money with these methods, regardless of the sport or other type of betting event. Simply, calculate the statistical chances of every game and set the odds by taking into account the probabilities and public opinion, and collect maximum money by balancing the book to maximize the profit.
How To Beat The Bookies: 3 Sports Advantage Plays
Now you know the enemy. Then we can identify the proper opportunities where we apply our Sports Betting 3 Tactics to beat the bookies. Those are Risk-Free Matched Betting, Arbitrage Trading a.k.a.Surebet & Value Betting on Software / Tipsters / System. In case, you have not been familiar with these tactics, please take a look at 3 Advantage Gambling in Sports Betting – Guide For Ordinary People To Beat Bookies which provide you with comprehensive logic behind these 3 Methods.
Let's see how our specific tactics are fit in the bookies' business model & how to beat the bookies nicely;
1. Reduced Margin Pricing Model
Let me start up with the Reduced Margin Pricing Model. This is the haven for professional punters, you can conduct Sports Arbitrage freely and keep winning with True Value Bets using Proven Software / Top Notch Tipsters / World Top System. However, given the absence of promotional offers, it is not for matched betting.
BTW, you may wonder how you find the True Odds. Yes, we can see bookies' actual odds in their site but where can we find the true odds? The easiest way to see a truer indicator of how much a bet is worth, you visit Betting Exchanges. On a betting exchange, users bet against users, called peer to peer system. Therefore the market is driven by supply and demand only and you usually see better odds compared to conventional bookmakers, which would reflect true odds in better way.
No Account Restriction
Importantly, given the nature of their business model, they don't care the winners. So you never worry about being gubbed. You can check the odds in major exchanges such as;
Alternatively you can visit Pinnacle. Why? They say
Traditional bookmakers with higher margins (105% – 112%) receive far less volume, and therefore their prices are not efficient measures of the true market price. To know the “fair” market price on a game, simply check Pinnacle’s odds 1 hour before the start of the eventPinnacle
Importantly, Pinnacle shape their odds using the early bets which are the bets of Expert/ Professional punters or the bets based on proven tipsters (handicappers) / systems as explained a few times later.
How Proven Software / Tipsters / System Find Value To Beat The Bookies?
The bookmakers keep Balancing their Book. Means the line / odds is flawed if it does not attract the same amount of action on both sides. However, from a smart tipster’s point of view, the line / odds is flawed when it does not compute to his predicted outcome of the game. A weaker team can actually become the favorite if public sentiment is with that team. When this happens the underdog presents a huge overlay for the seasoned tipster meaning that the odds are in his favor.
Team A should be a 3 point underdog to Team B. However The public loves Team A and are betting on them and the line moves to make Team A a one point favorite. Then Team B becomes an excellent bet. This is the contrarian principle and why many proven software / smart tipsters (handicappers) / top system go against the general betting public. Let me quote from the above Pinnacle Full Review;
Ability To Locate True Value
The top-notch software / tipsters (handicappers) / system develops an advantage over the bookmakers not only by their specialized expertise in particular sports category but also capturing the best value in the fluctuating odds in this way. You may be able to find value bet by comparing between the exchange's odds & bookmakers' odds though, you need high skill, huge data base and a lot of commitment on time & effort. It is not usually paid off in comparison with using software / top tipsters / system.
EV - Expected Value
So, let me put this Value into numbers a.k.a EV - Expected Value. We GEM always use this EV to assess available opportunities. EV is the Average amount a player can expect to win or lose if they were to place a bet on the same odds many times over. For Sports Betting, we use the following formula (exactly the same as Pinnacle article explains - click the right above image); EV = (Probability of Winning) x (Amount Won per Bet) – (Probability of Losing) x (Amount Lost per Bet) Let's use the previous Barcelona vs Real Madrid example. Assuming we bet £10 on Real Madrid, then;
- Probability of Winning = 22.2%
- Amount Won per Bet = £10 x 3.5 (don’t use original 4.5 because 1 is your own stake back when win) = £35
- Probability of Losing = Draw 28.6% + Barcelona Win 55.6% (don’t subtract Real Madrid win 22.2% from 100%) = 84.2%
- Amount Los per Bet = £10
- Then, EV = (22.2% x £35) – (84.2% x £10) = £7.77 – £8.42 = – £0.65
Remember Sports Betting Is Different From Casino
The good news is that unlike casino game where pure mathematics governs, sports betting relies on skill & the number is affected by subjective factors as well. So it's not necessarily you will surely lose if you don't have better skill to know the real true odds than bookmakers. The key point here is if you can find the bet with Positive EV, then it's almost certain that you will win average in long-term. This is called a Value Bet. Bookies have edge over punters in the form of Over-round. But the proven tipsters / proven system / value bet finder will identify a True Value Bet which gives you the edge over the bookmakers in the form of UNDER-ROUND. It is a Positive EV.
Proven Tipsters & Systems generate tips in the SELECTED BETS where they have SKILL edge over the book makers, which will actually become the Sharps' bets and these bets will shape Sharp bookmakers' (such as Pinnacle's) & Betting Exchanges' odds. And Value bet finders locate the value bets based on the odds differences between soft bookies and sharp bookies including betting exchanges.
So, as long as you keep betting on the bets with Positive EV suggested by the proven tipsters, it's almost impossible for you not to win. Therefore bookmakers consider you as a threat and restrict you. Having said, you need to chose the bookmakers that suit professionals, see List of 20 World Best Online Bookies that Never Restrict Your Accoun.
Not all the bookmakers listed in the above document use Reduced Margin Pricing model but offer attractive promotions. So it's good opportunities to make matched betting with those bookies.
2. Promotion Driven Bookmakers
As long as I see from the below steady revenue revolution of UK sports betting industry where promotion driven giant bookies dominate, I can't see significant reason that these bookies will stop bonuses and change their current business model at this stage;
Therefore, we can keep extracting cash from their lucrative offers via Matched Betting. For those who would like to see the exact instructions on each method, you may go: Matched Betting Guide where you see the full list of specific instruction on various offers.
Sportsbook Offer Value Assessment in EV
When it comes to the bookies' promotions, I would say nearly 100% of Welcome offers are +EV. Majority of Reload offers also indicates +EV, which even experienced matched bettors are not really aware of. Let me quickly share how you should assess value on a few key offers;
The popular type of "Bet £/€10 and Get £/€30 Free Bet" is often 100% Risk Free and basically no need to calculate EV. Only the type need to be assessed is the one requiring WR (Wager Requirement). It is the rollover you have to make before you can withdraw. Typically, "100% Deposit Bonus up to £/€200" with the 3x WR. Means if you deposit £/€200 and get £/€200 bonus then you need to stake £/€400 (deposit + bonus) x 3 = £/€1,200 before the bonus + winnings can be withdraw-able. We use the following EV formula to assess: EV = Bonus amount - (Required WR amount x Average Loss of Qualifying Bet) When you do matched betting, means backing at bookmaker & laying at exchange, you will create marginal loss due to the odds difference between the bookie & exchange and the exchange's commission. We can usually manage the loss up to 5%. Then, in the above example, the EV = £/€200 - (£/€1,200 x 5%) = £/€140, so Positive EV and no time to waste but should go for it. However, if the bookmaker requires 12x WR, EV = £/€200 - (£/€4,800 x 5%) = - £/€40, Negative EV. There's no variance involved because the outcome is guaranteed. Although you could still get lucky and lose your first couple of bets and not have to bother with the wagering, which would make this offer still worth trying. Yes you can understand the break-even condition is 10x WR in this case. Generally, you may decide not to go for the offer that requires over 10x WR. Don't worry, unlike Casino offer where 20X or 30X is common, in the sportsbook over 10x WR hardly exists. In fact I myself have never seen, thus almost all welcome offers are psitive EV means completely risk free.
There are many types of offers because bookies strive to create unique offers to attract existing players to boost betting. But, the most common type is "Refund Your Lose Bet IF xxx Happens", I'll share 2 types of offers to show how we assess & tackle the offers. "Money Back if Draw" This is typical Football reload offer. Say, Chelsea vs Manchester Utd, if your bet on correct score market loses and if the matches finishes draw, you will get money back up to £50. Simply you back & lay any correct score market and hope the draw happens. Remember, never ever bet on Draw Score such as 0-0, 1-1 to ensure when draw happens (we call it "Trigger / IF Conditions) we lose the bet since the refund comes only when we lose. If you can manage no loss in qualifying bet which you can do in the market like 1x2 match results, then it's risk free. However, usually it's quite difficult to find close back & lay odds in the correct score market, and if you bet £50 (the maximum refund), you may lose over 10% like £5. And there is no guarantee of the match finishes draw. So, how do we assess if it has a value. You can use our standard formula of
EV = (Probability of Winning) x (Amount Won per Bet) – (Probability of Losing) x (Amount Lost per Bet)
- Probability of Winning - this is the probability of Draw, as explained before you can go to Exchange to check the true odds, so assuming the draw odds in Betfair is 3.0, the probability is 1/3 = 33.3%
- Amount Won per Bet - this is the refund of £50, but you get it as free bet that is approximately 80% value compared with cash (because we may lose 20% when we matched betting free bet), thus £40
- Probability of Losing - this is the probability of Not Draw, so 100% - 33.3% = 66.7% (I simplified this case by not taking the over-round into account)
- Amount Lost per Bet - we assumed 10% of stake which is £5
Then, EV= (33.3% x £50) - (66.7% x £5) = £16.65 - £3.33 = £13.32 So this is the average expected return if you keep betting the same bet, and obviously worth pursuing. The easiest way to work this out is, when you receive the offer, see the IF Trigger (in this case Draw) and go to Exchange to check Lay Odds of Trigger. And calculate refund Amount divided by lay odds in this case £40 / 3 = £13.33 which gives you similar result of the above formula, just an instant check to confirm the value. Apart from this low risk & not guaranteed profit approach, we also have method to Lock-In Profit method although the expected return will be reduced. If you're interested in it, ; How To Lock-In Profit on Trigger Bet with Extra Lay Spreadsheet.
"Back A Winner Get Free Bet" Just another example. This is also popular offer along with "Refund If Your Horse Finishes 2nd" in Horse Racing offer. Basic approach is the same, back & lay the horse you select by hoping your horse wins or finishes 2nd. Many people wonder "I may keep losing because my horse never hit the refund trigger", understood, but we should evaluate it in numerical manner, rather than judging with gut feeling & fear. This time, let me assess the value from a bit different way. Assuming the offer is that you will get up to £50 Free Bet if your horse wins, and you bet on the horse at the odds of 4.0 (3/1) and lose 10% means £5 every bet. So, 4.0 odds represents 25% probability of occurrence. Means your horse will, on average, win one out of every 4 races at that odds. So, you'll lose £5 per qualifying bet four times before hitting a winner, a total loss will be £20. Then, you get a free bet valued of £40 in cash. Your total average profit is £40 - £20 = £20 Since this is for 5 bets total average, the average profit per bet is £20 / 5 bets = £4 Obviously, you are not going to literally make £4 with every bet, but over many dozens and hundreds of bets you repeatedly do, then the average will be surely materialized. You can't beat math but you can beat the bookies. You will receive these refund offers almost every day. For weekend you can place 10 such bets easily and it takes less than 1 hour once you get used to do it. Then £4 x 10 races = £40 hourly income is not bad. That's the power of advantage play based on mathematical rationale and the sure opportunity you can exploit in the Promotion Driven Bookmakers. BTW, for the above Back A Winner offer, there is a Lock-In Profit method. See my post of How To Lock-In Profit on Back A Winner Offer by Overlay Betting - Coral & Betfair Case.
For those who want to take Lock-In Profit method for the said 2nd Place Refund, although all the case doesn't apply, use 2nd Place Refund Horse Betting Calculator For A Guaranteed Profit.
Sports Arbitrage & Value Bet By Proven Tipsters
Although I said there seems to be no strong reason that soft bookies will change promotion drive model drastically, the rapid popularity of matched betting looks changing the climate gradually. Firstly, they accelerate the speed of gubbing, then changing the promotion into something that can't construct the matched betting. Means, the matched betting could be more short-lived down the road. Besides, due to the nature of risk-hedging, matched betting is all about scalping small profits, means it's not efficient. Therefore, we strongly suggest all the matched bettors (& arbers as well) start Value Betting On Proven Tipsters, which will take your betting activities to the next level. Because you can expect Larger Scale with Much Better Efficiency For Long-Term. See the key success factor which is How To Locate Best Tipsters.
Variance & Risk Tolerance
Value Betting on Top Rated Tipsters comes with variance, so it could lose 5 times consecutively losing £10-£20 per bet but you will win £200 in the 6th bet. Some is not tolerant during the 5 losing streak.
It is determined by Individual Character expressed in Emotional Toughness I explained in How To Make A Living Sports Betting – Full Assessment of 3 Methods By Numbers.
Therefore, if you think you are not tolerant against such losing streak, you must carefully approach to this method. Again, suggest take a look at Top Tipster Rating Site Review, where you can find the best & safest approach for such punters.
Surely, you can apply these methods to the Promotion Driven bookmakers. But, remember, it will accelerate the speed of being gubbed (account restriction) especially for sports arbitrage.
Precautionary Actions & Contingency Plans
Lastly, my favorite Sun Tzu's quote is “The supreme art of war is to subdue the enemy without fighting.” As explained, if the bookmakers find you as a smart punter, they will fight back by restricting your account. In order to avoid it you must stay low profile to avoid being caught by bookmaker's radar as best as you can.
However, in reality, if you keep taking too much value, it's just a matter of time before most of the soft bookies limit your account. So, we have prepared the following 2 guides - One is Before Restriction, The Other One is After Restriction;
I hope these electronic guide will be valuable as the original Art Of War written on the bamboo plates as you see in the above image and help you build extra income stream.
Joshua Walker (bio)
BTW, our 6 Advantage Plays are as follows;