How exactly does sports betting work?

We tell you about bookmakers, the business model and important terms related to betting

THE BOOKMAKER

To put it simply, the bookmaker is the one who books your bets on offered odds for future or current (live) events. As a betting provider, it guarantees the payout at the offered and booked odds of your bet. The bookmaker appears either digitally via its website or software where the bets are accepted, as well as in the classic betting office.

The bookmaker makes his money by putting his margin into the odds

is taken into account and thus secures your house advantage. That's why he wants to

encourage as many players as possible to place bets with him.

Therefore, he often generates offers like “Deposit €XX and get XX% bonus”.

However, the bookmaker attaches conditions to this bonus that you must meet before you can make a withdrawal. These can be, for example, minimum sales or restrictions on certain minimum quotas. You can find more details in the terms and conditions or eligibility requirements of the respective betting provider. Please read these carefully before depositing money and placing your first bet.

THE BETTING ODDS

A betting odds is the factor of your stake on a bet that will be paid out if you win. This factor reflects the betting provider's assessment of the probability of an event. Bookmakers set the betting odds based on their calculation of statistical probabilities.

Let's take these probabilities as an example: This results in the following odds:

Win Team 1: 50% (0.50) Win Team 1: 2.0 (= 1/0.50)

Draw: 25% (0.25) Draw: 4.0 (= 1/0.25)

Win Team 2: 25% (0.25) Win Team 2: 4.0 (= 1/0.25)

However, the bookmaker would not make any profit from this, as statistically speaking he would pay out all of the losers' bets to the winners (50% vs. (25% + 25%). The total must be 1 or 100%. So he calculates with one Depending on the bookmaker, this margin varies between 2-20%. In our example, the bookmaker takes a margin of 10%. This results in a factor of 0.9 , as it only pays out 90% of the bets.

This results in the real odds: Win Team 1: 1.8 (= 2.0*0.9)

Draw: 3.6 (= 4.0*0.9)

Win team 2: 3.6 (= 4.0*0.9)

It is now very important for the bookmaker to constantly adjust these odds because, on the one hand, the bets are not placed equally and, on the other hand, external influences (injured player, cards, weather, etc.) influence the probabilities.

EXPECTED VALUE - EV

To be successful in sports betting in the long term, it is important to understand and calculate expected value (EV). The expected value (EV) shows whether you will make a profit (+EV) or a loss (-EV) in the long term. It is calculated by multiplying all possible outcomes of a bet by their respective probabilities and adding these values together.

Here is a simple example of calculating expected value:

(Amount of winnings x probability of winning) - (Amount of losses x probability of losing) = EV

Imagine betting €10 on a coin toss with a fair 50/50 chance (odds 2.0). The coin toss can land on either heads or tails. If you apply the formula, the expected value is 0:

(10€ x 50%) - (10€ x 50%) = 5€ - 5€ = 0

This means that if you repeat this bet often enough, you will not make a profit or loss in the long term. Of course, in the short term there may be gains or losses depending on how many of your bets you win or lose. These short-term fluctuations are called variance.

Now let's say you get a 10% bonus for every head landing. Now, of course, you bet on heads. With this bonus the calculation now looks like this:

(€11 x 50%) - (€10 x 50%) = €5.5 - €5 = €0.50

Thanks to the bonus you win on average €0.50 per bet. While that doesn't sound like much, in the long run these gains add up. As long as you are willing to make this bet again and again, your balance will increase in the long term.

However, this is unlikely because the expected value on the other hand is negative:

(9€ x 50%) - (10€ x 50%) = 4.5€ - 5€ = - 0.50€

Even if you make losses in the short term, your balance will grow in the long term thanks to the positive expected value (EV). The variance can lead to extreme fluctuations, but a positive EV means your balance will increase in the long term. In summary: To be consistently successful, you should look for bets that have a positive expected value.

Please note: This is assistance and not official advice. Play safely and responsibly.