There are two major ways to be a sports bettor. The casual strategy is to hope for the occasional win, usually via parlays and low-floor, high-ceiling slips. As for the advanced one, it’s a method that focuses on establishing a process and compounding an upside through consistency.
In this article, we will focus on the latter from the point of view of odds comparison, shopping, and exploitation. It’s not a trick or a gray area, nor is it a way of guaranteeing wins. Far from it, in fact.
What we will discuss is the actual principle behind choosing the best set of odds for a particular outcome. It’s about maximizing the return for a certain bet when compared to the rest of the sportsbook prices.
As we go along, you will get a valuable presentation on the idea of margins, how differences in odds appear, and why this practice can present upside. It’s all in the interest of helping you make more focused and responsible decisions in the long run.
What does the margin represent in sports betting odds?
The margin imposed by the sports betting model of odds is the house edge that we find in almost any set of prices. It’s an addition placed on the numerical indicator of how the sportsbook thinks a match is about to go.
Let’s take an example from association football:
- Team A, which is the underdog, has 4.29 odds to win, or about 23.3% in implied probability.
- Teams drawing is an outcome with 1.47 odds to win, and that’s 68.2%
- Team B, the heavily favored one, has 7.30 odds, or about 13.7%.
If you add the implied probabilities into a sum, you have 105.2% in total. The 5.2% is the overround, which is generally between 4% and 7% at most commercial sportsbooks.
If we were to eliminate the vig through a calculation process, the actual prices would be:
- Team A: 4.51 odds with a 22.2% implied probability.
- Draw: 1.54 odds with 64.8%.
- Team B: 7.67 odds with 13%.
As you can see, we are dealing with a situation in which the real valuation of each outcome would, in fact, yield more money per pet. Let’s assume that you use a $10 stake for these results.
| Team A | Draw | Team B | |
|---|---|---|---|
| Initial Odds | $42.9 | $14.7 | $73 |
| Devigged Odds | $45.1 | $15.4 | $76.7 |
As you can see, the differences rise as the odds increase. If they are very long, the vig is proportionally higher, which means that there’s a higher level of dissonance between a normal and a no-vig price. Your objective is to find odds that are closer to the devigged price because it nerfs the bookie’s margin and gives you a higher value per bet.
For the rest of this article, we will deconstruct and discuss why chasing this margin, small as it is, is important in the long run, and why it can appear.
Explaining the calculation mechanism
Almost no sportsbook in any market will provide odds without this vig. This margin is the bread and butter of their operation. Each win that you receive will have a smaller amount than the probability would naturally suggest, and that’s the margin.
When you see that a bookmaker’s odds in an instance differ quite a lot from those of its competitors and appear as if it’s a fair one (devigged), it’s not because of its kindness or something like that.
Instead, it’s an error in its process to set that price. These bookies settle on a set of odds either by using an internal, proprietary formula or by adding their own vig to the offering provided by a sharp bookmaker that serves as an industry reference point.
These formulas, which are the ones that can generate such mispricings, use indicators of form (recent team record and individual scores/performance metrics from players), historical head-to-head, and context like the stadium, crowd, forecasted weather, and so on.
If there’s an error or misstated element in this formula, this is where the sportsbook has a problem. This is with the initial price.
Down the line, as sharp money (highly efficient bettors with proven track records, mass bets, and news/updates (injuries, for example) start becoming influential, the bookie can simply make too strong an overcorrection. Even if it’s for half a day, this is where exploiting the margin comes in for a bettor.
Choosing the best odds: price shopping and its importance
Since sportsbooks look to balance the odds in a way that outcome probabilities reflect money movement and public sentiment, your purpose is to monitor the results of this process.
In the next two subsections, we’ll address the method and the goal that goes into price shopping.
Comparing your options helps you at first
We’re starting with the main tool that will allow you to assess your options and pick the best one: an odds comparison service.
Thankfully, there’s a healthy market for these. Whether it’s an app or a website, you should be looking for a product that provides prompt updates and lists the right bookmakers. Naturally, these sportsbook options must be available in your jurisdiction. Local legislation and, if the case, licensing are what influence the assortment of operators.
The offering of markets is also important. In general, value betting refers to the prices of the winner, but there can be spreads, result-based options, or other props.
You may also want to search for a service that has an automated process for as many sports as possible. The BetBrain odds comparison model has proven that providing a database of instantly-updated prices for numerous leagues and competitions is where the market is heading in terms of popularity and quality of service from this point of view.
Disclaimer: Online gambling is only for those who are at least 18 years old, and it must be used responsibly. Visit NCPG’s help treatment portal or give them a call at 1-800-MY-RESET if you or someone you know struggles with gambling addiction.
When you put these versions of the same price side by side, you’ll also want to avoid aggregates. Some of them will give you a collated, orientative set at the forefront. You want to assess the picks of each sportsbook individually to identify a price that works for you.
A clear goal is to achieve a positive closing line value
As we showcased in the table where we presented the differences across odds, your initial target when comparing your options is to get the most favorable choice at hand.
The other one, which price shopping helps with, is to obtain the closing line value. This is where the change in sportsbook odds comes in. If the lines move, you may be in a position where choosing the right one at the start achieves additional theoretical value.
Let’s take an example from American football and its dualistic, no-draw style of outcomes and subsequent bets.
- Team A has 1.56 (-180) odds to win the match in the opening. If you bet $10 on this outcome, you win $15.56 in total payout.
- Let’s say that there has been a recalibration caused by a reassessment, sharp money, or other factors. Now, the same result (Team A winning) has 1.50 (-200) odds to win, which means that the total payout would be $15 flat.
- If you made your pick at the start and bet on 1.56, you received half a dollar more in winnings if Team A does, indeed, win.
- Now, if, at the opening, most other bookmakers offered 1.52 (-190), but you bet at the one that had 1.56, betting on the other ones would’ve meant ~$0.25 in closing line value. That’s still something, but it’s less.
What this example showcases is that, when both positive CLV and favorable pricing come in, your margin increases twofold.
Recognizing the difference between process wins and correct bets
This is where you need to remember to temper your expectations. All these examples show that the upside for each bet you make based on these strategies is small. What actually happens is that these wins add up, especially over an entire season.
The other thing to note is that not all the picks you make will be correct. Sometimes, an injury moves the odds against your initial wager, which means that you have negative value. It isn’t indicative of a bad process; it’s just bad luck. It’s a lack of foresight or analysis at best.
There’s also the core aspect of sports betting: it’s still gambling. Upsets happen all the time. If you bet $100 on a favorable price and with $5 in positive CLV, but your wager was on a favorite that lost despite being the heavy favorite, it’s still a $100 hole in your pocket.
What you need to understand is that making the right price and line choices is a process that indicates correct thinking and a keen understanding of the market. It’s far from a guarantee of winning, and it’s a dangerous proposition to chase big margins by making major bets.
The long-term effort and outlook
Another thing to remember: the long game requires an overhead cost. To make the price shopping strategy work, you need to accept that you will lose some money.
At the same time, you’ll need to move fast when you spot a misplaced set of odds before recalibration. This means that, most likely, you’ll need an existing verified and funded account at that certain sportsbook.
It all translates into having multiple memberships at various bookmakers and depositing money into your balances to ensure you can bet right away. It’s blocked money, which would require you to feel like the whole process is worth it.
Naturally, the effort of constantly looking, assessing, and judging opportunities can be taxing. You’ll want to make sure that you want to do such a thing before you start preparing the grounds for it. Sometimes, casual betting is more in line with your personal style.
Conclusion
That’s what we had prepared for this article. It’s an explanation and slight meditation on the nature, upside, and difficulties of this process. Compounding margins requires a bit of reliance on helpful services of odd comparison and some strategic thinking.
Of course, you also need to be in tune with the sport that you’re betting on. Part of the responsible gambling outlook that you need to maintain is to make informed decisions, and budgeting comes after knowing the facts and realities of it. Bet carefully!