20 Years Experience
As a bookie, one of the things you need to fully understand for your business to be successful is betting odds. And in the sports betting industry, the term can be confusing, since in this context, what we refer to as ‘betting odds’ do not actually represent the chances of something happening but rather, the amount of money that you will pay out to a potential winner.
The fact that you have to save room for profit means you need a clear grasp on how betting odds are figured out so you can adjust them to your business needs. You always want to make sure the payout you give to the winner is actually less than the real probability of winning. The profit margin you leave is what we call the over-round. 
When figuring out the odds, first determine the actual probability of a team winning over the other. You can express this as a fraction indicating the likelihood of the win. For example, if two teams have an equally good chance of winning, this can be expressed as 1/2. Next, convert the fraction into a percentage by dividing the numerator by the denominator and multiplying it by 100. For example, if you have a probability of 2/5, you divide 2 by 5 and get 0.4. Then you multiply 0.4 by 100 and get 40%.
After you have the actual percentage chance of a win, determine the over-round. Remember what the over-round was? It is the profit you reserve for yourself, which will depend on your business and the type of bets you are working with.
For example, if the real probability of a win is 40%, and you reserve a 10% over-round, then you will add up both percentages to get the betting percentage. For all intents and purposes, the chance of winning will become 50%. You can express this percentage as a fraction as well by placing it over 100. For example if the betting percentage is 50%, you can express that as 50/100, and reduced to 1/2 or 0.5.
Finally, convert the betting fraction into the betting odds by dividing the betting probability by 1 minus the betting probability.
This can be expressed as the formula P / (1-P), where P is the betting probability. For example, if the betting percentage is 40%, the probability would be 2/5, also expressed as 0.4.
Using the formula above, you will have that the betting odds are equal to 0.4 / (1-0.4) = 0,67 or 2/3. Betting odds are also expressed as a ratio, as in “2:3 on” or “2:3 against” which means that for every $2 bet, the payout is $3.
It is important for every bookmaker to understand this, but the actual math is usually done by bookmaking software. Price per head is a booking software provider that offers outsourcing solutions for local bookies and bookmaking businesses looking forward to improve their technology and software and be able to service a larger number of players, or simply to offer a high quality professional interface to their betting clients.
Michael Hill is an avid sports fan and a sports writer who has been in the betting and price per head industry for years. Michael writes about his experience and offers tips for other aspiring entrepreneurs who wish to make a living with sports bookmaking.
Marketing & SEO
mikehill010@gmail.com
