You Can Win More Often When You Investigate and Learn Bookmakers Betting Percentages

Having worked in the bookmaking industry for over a quarter of a century I am frequently being asked various questions about my job.

For many years I was involved in the compilation side of things when I explain that to people I am often met with a blank expression.

Sure they will have an interest in horseracing or maybe another sport but it never ceases to amaze me how many people have difficulty in understanding bookmakers and the mechanics of betting. 

When you learn and understand what the bookmakers do it enables you to profit.

Betting is all about fractions and percentages. 

When issuing odds on an event a bookmaker will need to have a set percentage built into their prices in his favour.

If the odds on the event do not add up to over 100% then basically the bookmaker will lose.

Coin Toss

EG a coin toss, the possibilities of either heads or tails is 50/50, therefore if he offers 1/1(Evens) money on each outcome and takes say £100 on each he will be paying out £200 having only taken in the same amount.

If he went 11/10 each outcome and took £100 on each he would be paying out £210 having only taken in £200 in stakes. In both cases there would be no margin in his favour. When an event only has two possible outcomes the margin on the bookmakers side will be a small one, if both possibilities have a similar chance of success he may then offer 10/11 each outcome, which adds up to 104.76%.

He may choose to slightly favour one outcome and offer 5/6 & 1/1 (Evens) which adds up to 104.54%, these margins are referred to in the betting industry as overrounds. The more possible outcomes to an event then the bookmakers overrounds will generally be higher.

Win Calculations

So how do we calculate what price a percentage represents or how do we convert those odds to percentages? I will try to explain the process as easily as I can although to the novice punter it may appear slightly complicated.

Every bookmaker price can be converted into a fraction. 9/4 for instance represents 30.769%, how did I get that? Add the 9+4 = 13 and then divide by the 4 this gives you an answer of 3.25. 100 (the %) divided by the 3.25 then gives you the 30.769.

A quicker way to get there is to memorize what the returns would be to a 1 unit stake at whatever price you wish to work out a percentage for. EG a one unit stake at 7/4 gives you a return of 2.75, 100 divided by 2.75 gives you 36.363 and that is the percentage that 7/4 would represent when compiling odds for an event.

One unit at 11/4 gives you a return of 3.75, 100 divided by 3.75 gives you 26.667 and that is the percentage 11/4 would represent. Hopefully you get the idea.

The percentage calculations for the place part is done in the same way but would obviously depend if it was 1/5 odds or 1/4 odds a place. EG place 13/2 at 1/5 odds (multiply the 2 by 5 = 10 add it to the 13 makes 23 then divide it by the 10 = 2.30, 100 (%) divided by 2.30 = 43.478%)

If it was 1/4 odds a place then it becomes (2 x 4 = 8, add the 8 to the 13 = 21 then divide it by the 8 = 2.625, 100(%) divided by 2.625 = 38.09%)

When all possibilities for an outcome or all competitors for an event have been priced up then the bookmaker would total up the percentages to check if they would be competitive enough with his competitors.

If he had too much built in (over rounds too high ) then his odds may appear uncompetitive and he would see a low turnover, if he had too little built in then it is likely that he would see plenty of business but his potential profit margins would be at risk.

As I mentioned earlier the more competitors in an event generally means a higher overround built in to the bookmakers odds. Say for instance the bookmaker was pricing up a fifteen runner horse race, he may wish to bet to around 125%.

This would mean that if he laid every horse in the race to take out exactly the same amount he would make 25% of his turnover on the race. The odds could go something like this.

…………… Win % …………. PL 1/5 Odds ……. PL 1/4 Odds

10/3 …… (23.08%) ….…. (60.00%) ….……. (54.54%)

4/1 ……… (20.00%) ……… (55.55%) ……….. (50.00%)

6/1 …….. (14.29%) ……… (45.45%) ……….. (40.00%)

9/1 …….. (10.00%) ……… (35.71%) ……….. (30.77%)

12/1 ….. (7.69%) ……….. (29.41%) ……….. (25.00%)

14/1 …… (6.67%) ……….. (26.32%) ……….. (22.22%)

14/1 …… (6.67%) ……….. (26.32%) ……….. (22.22%)

14/1 …… (6.67%) ……….. (26.32%) ……….. (22.22%)

16/1 …... (5.88%) ………. (23.81%) ………… (20.00%)

20/1 …… (4.76%) ……….. (20.00%) ………... (16.67%)

20/1 …… (4.76%) ………. (20.00%) ……..…. (16.67%)

25/1 …… (3.85%) ………. (16.67%) ………… (13.79%)

25/1 …… (3.85%) ………. (16.67%) ………… (13.79%)

25/1 …... (3.85%) ………. (16.67%) ……..… (13.79%)

33/1 …… (2.94%) ………. (13.16%) ……….. (10.81%)

Win Book ......................Place Book ...........Place Book

(124.96%) ……………. (432.06%) ……….. (372.49%)

Each Way Calculations

The place book overrounds may at first glance seem excessive, but do remember that bookmakers would be paying out three places on a race such as the example given. The higher the overrounds for the Win book then the higher those for the place side of the book would become.

In this case 125% for a fifteen runner race is quite acceptable. You may also notice that bookmakers may also build in a higher margin for their early morning odds until a market may have settle down, the case may well be the same for minor meetings, whereas for top meetings betting is generally more competitive.

Betting Each Way may not be everybody's cup of tea but there are cases when it can be played to your advantage, these are usually referred to as ‘' Bad Each Way ‘' races. These are when the bookmakers overrounds for the place side of the market are quite low for the type of race, in most cases when there is an odds on favourite.

EG ( A nine runner novice hurdle say ) 1/6 7/1 16/1 20/1 20/1 33/1 50/1 66/1 66/1 gives you an overround for the win book of 121.5% which is fair , but it's the place book which gives punters the upper hand, the place odds ( at a fifth ) at those same nine prices become 1/30 7/5 16/5 4/1 4/1 33/5 10/1 66/5 66/5 which totals up to only 238.6% with three places to be paid, this would leave the place book 61.4% over broke ( short of the required 300% to break even )

Why not when you next look at a betting market work out the percentages using the following table.

Betting Odds and Percentages

Odds compilation is like riding a bike, once you have learned to master it you tend not to forget. Having this knowledge in your betting armoury will stand you in very good stead and should enable you to profit

I hope you have found this article interesting and of some use in the ongoing battle with the bookmaker, at the very least it's shown you how the mind of a semi retired odds compiler works.