Behind the Sports Betting Curtains
May 3, 2012
The old way
Sports betting is a huge business bringing around $250 billion annually in bets.
A while ago, punters walked into a betting shop to place a bet on a sporting event. Now, they can easily do so from their computer or via smartphone betting platforms.
What is more interesting is the growth of live in-play betting on events taking place during a game such as a Premier League match. Nowadays, 5-minute bets are becoming popular. These are wagers on what will happen in the next 5 minutes. For example, will there be a corner or not?
The increase in betting certainly benefits most sportsbooks. Big bookmakers such as William Hill can make over a billion dollars in net revenues a year. At the same time, pure online top sportsbooks, such as Bet365, make half that.
How to they manage to rake in such numbers given it’s such a risky business? What they do, as sports betting news report is relying on sophisticated computer algorithms. To ensure the algos don’t get whacked out, the so-called traders constantly observe and study multiple screens, just as Wall Street foreign exchange traders do, to see if the profit is made on particular sets of open bets.
Moreover, the traders watch the games and follow the news regularly to support algorithmic calculations. As with strategic accounting at casinos, the sportsbooks also seek the edge, meaning that if I chance for a particular event occurring is 12/1 (or 8.3%), the sporsbook will offer a payout of 10/1.
Sometimes sportsbooks may give odds on which they’re likely to lose money. This happens when they seek to gain new clients. Bonuses, just like casino bonuses, are also offered. But, these come with wagering requirements (i.e., wagering the bonus 5 times).
What is also interesting is that different sportsbooks will give varied payouts for the same events. Apparently, each estimates likelihood of an event separately. For the serious punters, it is advisable to have several sportsbook accounts, and once a decision to bet is made, the best odds can be chosen. This is one of the smart strategies in betting. Good luck!