Estimating the accuracy of bookmaker odds

In order to regularly make a profit in long-distance betting, one must be able to assess the probability of a particular outcome of an event better than a bookmaker. In turn, this means that in order to outplay the bookmaker’s office, you need to thoroughly know how the odds are formed. Let’s try to figure it out in this material.

Obviously, there are two options for the development of any sporting event: the expectations from it are either justified or not. At the same time, the expectations of the clients of the bookmaker companies are expressed in the monetary equivalent of their bets on a particular event. Bookmakers take advantage of this by adjusting the odds initially set. Thus, a kind of collective opinion is formed about the outcome of an event, which is expressed in the final quotes for its outcome. Moreover, this opinion may not always be objective and reflect the true state of affairs.

It follows from this that the more popular the betting market, the higher the probability of a more accurate collective assessment of the event. That is why the bookmaker margin is lower in the quotes for the matches of, say, the leading European championships than for the games of any Asian or African league (with all due respect to them).

Clients’ opinion of BC Pinnacle

The performed check revealed the accuracy of the betting odds of the Pinnacle bookmaker on the money line (1-X-2) market for football matches, confirming the fairness of the opinion of our bookmaker’s clients. The probabilities of expected outcomes expressed in terms of coefficients were compared during the verification process with the actual percentage of results; on average, the numbers were close to each other.

Let’s clarify: teams with quotes for their victory of 2.0 (excluding the bookmaker’s margin of BC Pinnacle) win about 50% of the time, teams with 3.0 odds – about 33%, and so on. This, of course, is not the most important proof of market efficiency, but it still has a right to exist.

For a team to win, draw or lose in one single match, different bookmakers offer different odds, albeit relatively close to each other. For example, in one of the recent matches of the English Premier League, the home victory of Manchester United over Chelsea was estimated at the Pinnacle bookmaker at a coefficient of 2.22, while the quotes of other leading bookmakers ranged from 2.15 to 2.33 … Whose odds were the most accurate?

How accurate are Pinnacle’s odds compared to other bookmakers?

To find out how accurate the Pinnacle bookmaker’s quotes are, you need to:

  • assume that our non-margin odds provide an accurate measure of the true probabilities of outcomes;
  • then the ratio of another bookmaker’s quotes to our odds represents an indicator of the expected value or expected return;
  • then the actual profit should be analyzed according to different expected values.

So, without taking into account the margin, the estimated coefficient of BC Pinnacle for Manchester United’s victory over Chelsea was 2.25 – this gives a probability of a result of about 44%. Then, given that the best offer on the market was 2.33, the expected return would be 3.5% (2.33 / 2.25 = 1.035).

Conversely, placing bets at odds below 2.15 would have an expected return of 0.956 or 4.4% loss (2.15 / 2.25). If it turns out that an expected profit of 3.5% (or a loss of 4.4%) is confirmed by an actual profit of 3.5% (or a loss of 4.4%), it can be concluded that the Pinnacle ratios are effective. , accurate and correctly predicted.

To see if Pinnacle’s soccer odds are correct, the chart below compares a sample of approximately 35,000 league matches played over the past few seasons in Europe, with a corresponding 105,000 possible money line results. (win-draw-lose):

As you can see, the correlation between the estimated and real income at rates is very high and is essentially 1: 1. In other words, if the expected return on bets for a sample of matches is 90%, then the actual return is approximately 90% (or the loss is 10%). If the estimated return is 105%, then the actual return will be around 105% (5% return).

What other bookmakers have?

At the same time, if we assume that other bookmakers assumed the odds close to the true probability of the results, then in this case there is no correlation between the expected and actual results. Thus, Pinnacle bookmaker quotes are the most accurate.

There are two explanations for the fact that other bookmakers post quotes that are relatively different from the actual expected values. First, they simply do not know how to set the correct values, however, given that for comparison we took long-standing and recognizable bookmaker brands, this assumption sounds fantastic.

Much more plausible is the assumption that they deliberately bias the odds not in favor of market efficiency, thus promoting some of their own business models. If in the formation of a collective opinion in the Pinnacle bookmaker, primarily experienced professional players are involved, then most other bookmakers rely on the gross opinion of amateurs, that is, in fact, they rely not on quality, but on quantity. Accordingly, the quotes they expose offer ample opportunities for fans of so-called arbitrage bets, or, simply put, “arbers”.

Of course, these bookmakers do not like it when individual players, using their own shortcomings when setting quotes for matches, regularly make a profit due to “forks”, and they are “cut”, and more often than not they simply close their gaming accounts.

Moreover, sometimes such bookmakers do not disdain the fact that they block accounts and just skillful and experienced players who do not use “surebets”, but regularly catch such offices on mistakes. Of course, clients of the Pinnacle bookmaker can be absolutely sure that neither in the first nor in the second case, their accounts and betting limits here will in no way be limited or even more so blocked.

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