Making Money in Gambling by Watching the Odds
There are many times in gambling when you see a price you like, but just as you go to take it the price moves and you miss out. The following article explains the various reasons why these price moves happen, and knowing these reasons, how you might be able to use them to your advantage in betting.
This overview is part of the exensive library of betting strategy articles here at High Tech Gambling. These range from overview / beginner pieces though to advanced guides. Here are some popular examples:
- Value Betting for Profit (part 1 of a 5 part series)
- The Trap of Last Game Bias
- Betting Psychology Series (part 1 of 3)
- Main Betting Strategy Articles List
Why Odds Change – Early Betting Odds
Depending on which sport you are gambling on, at some point before the event takes place a bookmaker will offer a first price on the event. A baseball game may offer the first price on the morning of the game (having played the night before), a tennis match may be priced a couple of days before (when the match-up is set) or a soccer game may be priced up a week or so beforehand. These early prices will be set by the team of odds-compilers and will be based around the probabilities of the outcomes. As an example, two days before a tennis match the odds-compilers may not be able to split the two players, and therefore offer odds of 10/11 (1.91) about both players. In an ideal world the bookmaker would now receive an equal amount of money on each player and guarantee a profit. In this case, if they took a thousand pounds on each player, they’d receive £2,000 and only pay out £1909 to the winning bet – a guaranteed profit of £91, with no risk at all. On some occasions this is exactly what will happen, a great and relatively simple situation for the bookmaker, and if every book was like this the job of a bookmaker would, as well as being very profitable, be extremely easy.
Why Odds Change – Reasons for Price Movement
We now move to an hour before the tennis match, and the odds of the match now look completely different – one player is now 4/6 (1.66) and the other is 11/10 (2.1). So what could be the reason for this? There are actually two potential reasons.
The first reason is that something has happened to one of the players in the time between publishing the early price and now. Maybe the player hasn’t trained because of a strain, or one of the players turned an ankle in training – maybe a player tweeted either good or bad news about their preparation for the match. Bookmakers will react to this information, and move the odds accordingly.
The second reason is that one of the players has been bet on heavily, much more money coming in for that player over the other. When a bookmaker takes a majority of money on one particular selection they will have an uneven book, making a loss on that player, and a profit on the other – so they will shorten the odds on the player taking the money, and lengthen the other player. This should achieve the objective of evening their books up somewhat, if it doesn’t, they may well shorten the odds on that player again. They may keep shortening the odds, or make a stand, thinking they have taken a lot of money at bad odds for that player.
So the next question is – why is so much money coming for one player? One reason is that the bookmaker has actually made a mistake and their initial odds were well out of line – and this can be the case, especially in the less popular markets. However, the most likely scenario here is that the player being backed is simply more popular. When I say popular, it’s not necessarily in the sense that they are well known, or well liked (although in many cases this will be the reason), but it might be that a large circulation newspaper has tipped the player to win, or a global website has done a focus on the player, or some other reason to do with the media.
Why Odds Change – Taking Advantage of Changing Odds
You now know why the odds might have changed, but how can you take advantage of this price movement?
The first way is to be on top of the news. You know that the two tennis players are priced at 10/11 two days before the match, and then you see a tweet from a leading sports website that says “Player A is a doubt because of a wrist injury” (in other sports you might see, as examples “Wayne Rooney is out injured for Manchester United tomorrow”, or “LeBron James will be rested for tonight’s Heat game”). You quickly go to your bookmaker, and see that the price is still 10/11 on both players – take the 10/11 on the player who isn’t injured, the odds will surely move soon, and you’ll have a great value bet.
The second way to take advantage is by not falling for “false” price changes. You agree with the opening line on that tennis match, the players are indeed evenly matched. However, as stated earlier, one player is now 4/6 and the other 11/10. This time you see no real reason for this – there are no reports of injuries, but you know that that the player whose price has shortened is much better known player, and has half a million followers on twitter, and you figure this is behind the price movement – (you could use the same reasoning for a popular, well supported soccer/baseball/football/hockey/basketball team). In this case, you are now receiving a good price on the other player, odds of 11/10(2.1) on a real 50/50 shot – a great value bet.
Why Odds Change – Knowing the Difference
Understanding why the odds might have changed on a sporting event is a tricky skill, but in this day and age of 24 hour news you can be on top of things just as much as a bookmaker might be, or even one step ahead if you follow the right people on twitter or use the right websites (where perhaps in times past bookmakers may have had an advantage in this area). Be quick when you see something that you think might have an effect on the odds – you won’t be the only one spotting it, but you might have a head start on the bookmaker. If odds do change when you see no reason for it, give serious consideration to backing either the team or player who is now longer than you think they should be.