The Sports Bookie Blog

Person-to-person betting on exchanges is a relatively new phenomenon made possible by the Internet.

Betting Exchanges are sites where you can offer your own odds to other people. You can also accept the odds offered by others. Betting Exchanges comprise of a range of different betting markets (eg football, NFL, ice hockey, etc.).

No bookies are involved - the odds are offered by other punters just like you and the Exchange takes a fee (commission) for facilitating the deal. A straight win single bet is called a “back” bet. You can also place “lay” bets betting that an outcome won’t happen… and you can often bet while a game is in play. (In-running bets).

Betting Exchanges use a decimal odds system as they are easier to compare (so a few conversions for you UK and US punters!) - and you can get great odds if you know what you’re doing, but not always!

In general, Betting Exchanges are fairly complex - and not for novices as you really need to do your homework.

When you bet with a Bookmaker you’ll get ‘fair’ odds (as determined by the market) and you’ll also have a customer service team you can call on with any questions or problems. At a Betting Exchange you’re on your own - if you misinterpret the odds or make a mistake you wear it - there is no comeback and in any given wager you still may not be getting odds as good as those available through a bookmaker.

We hear the occasional ‘horror story’ where punters simply did not understand what they were committing to with their ‘great bet’ or had forgotten to allow for commission, etc.

A book we highly recommend as a good investment of a tenner: The Definitive Guide to Betting Exchanges by Paul Kealy

COMPARE THE BEST BETTING EXCHANGES

BetFair™  is the World’s largest Betting Exchange. Established in 1999 the UK licenced and based BetFair is owned by The Sporting Exchange Ltd. BetFair is only a Betting Exchange (although has extended recently into online poker)

COMMISSION:  Betfair charges a Commission on your net winnings on a market. 5% is usual with discounts applying for frequent punters (up to 60% discount - ie a minimum commission rate of 3%)

SPORTS COVERAGE: BetFair’s betting coverage is very good. It is global (ie includes NFL, NBA, etc even though they do not accept USA members) Coverage is not as deep as Betsson for lower division football bets. (Note: BetFair has been known to extend to a new market if there is sufficient demand - contact them!)

Betsson™ established in 2000 & is UK licenced. Betsson is part of the successful & rapidly growing Swedish Stock Market listed Betsson Group. They offer  betting exchange services in addition to a conventional sports bookmaker bets. (Plus Casino & Poker).

COMMISSION: Betsson deducts commission at a rate of four (4) per cent or lower calculated on your net winnings on any single Market when backing, laying or selling. Losing bets do not incur commission.

SPORTS COVERAGE: Betsson’s European football betting coverage is the best we’ve seen (if you want to bet on a Division 2 Polish side - Betsson is the betting exchange for you!)

An arbitrage bet potentially exists when contrasting odds occur across different bookmakers, sports books or betting exchanges for a given event or game.

Arbitrage is also referred to as sure bets, scalps, no-risk and risk-free bets.

In theory, in an arbitrage situation, you can guarantee a profit regardless of the game outcome by placing balanced bets across all possible outcomes (e.g. in football,  win, draw, and loss) at the best odds for each outcome.

In practical terms, however, real arbitrage opportunities seldom exist - and certainly not in sufficient quantities and percentages to be viable for professional punters.

If you are prepared to consider lesser (more dodgy) bookmakers you may be able to create an opportunity but the process can be far from “no risk”.

Top numbers man and betting tipster, The Gooner of www.goonersguide.com, considers that there are three main issues that dispel the myth of sports arbitrage. They are voiding, volume and money management.

Voiding
Bookmakers have rules covering themselves for “palpable error”. If they get a price wrong on their web site they can void all bets at that price. So if you take bets to cover the arbitrage that are subsequently voided you’re in trouble as your “no risk” bet has suddenly evaporated. This happens and punters find themselves risking a very large bet on the other legs of the arbitrage!

Volume and Timing
The second big issue with arbitrage is whether you can get enough volume and at the right ratios to get a real arbitrage opportunity.

When a bookie is markedly out-of-step with the market and creates an arbitrage situation, they are likely to take a lot of bets from general punters anyway (ie not just those trying to achieve arbitrage) and as such arbitrage windows are usually closed quickly by natural market forces.

As most arbitrage bets offer just a 1-3% profit (ie the overall difference between the balanced bets across all possible outcomes), in order to make $20 profit you’ll need to have $1000 wagered across the bets. You have to be very sure that all legs of the bet will accept the volumes you want to place in order to make the bet risk free.

Imagine the sinking feeling you’ll get if you’ve placed the $800 on and can’t get the remaining $200 placed to achieve the arbitrage. (For example you might be limited to $20 per punter instead and you no longer can achieve a balanced bet or have a ‘sure win’ situation).

Money Management
Thirdly, in order to profit from arbitrage you need to have active accounts with lots of bookies – maybe as many as 20 to 30 – to be able to identify and take advantage of discrepancies in pricing. Your betting bank (your total funds in all bookmaker accounts) needs to be spread across these bookmaker accounts in order to allow a quick response.

You also need to be able to move your available funds across each of your betting accounts quickly and without losing value. Remember that some e-wallets and many online bookmakers will charge you either a fixed fee and or a percentage each time you make a withdrawal. It is common practice for bookmakers to limit you to one free withdrawal per month.

With 20 active bookie accounts you potentially need $10K in your betting fund spread across your bookies in order to place $1000 arbitrage bets. If it is a 2% arbitrage on offer – that means just $20 profit. In our view if you’ve $10K tied up, you’d be better off just putting it in the bank!

Arbitrage is a notion that sells books and subscriptions to web sites supposedly listing arbitrage opportunities. The size and scope of the arbitrage is generally so small that these opportunities can disappear literally within minutes.

Where Arbitrage can give great value - the free bet !
When a bookie runs a promotional offer or free bet you sometimes can get value from arbitrage bets. You can lock down one leg of the bet (the free bet or cash back deal) and all you’re really looking to do is to place contrasting bets to get close to 100% stake return, no matter what result. Pocketing the promotional offer or free bet is your objective.

A memorable 2006 example saw an aggressive and relatively new sports book offering a $1000 cash back deal on an NFL football game. By taking the bet with them and placing a ½ sized bet on the opposition at another bookie, punters were guaranteed to pocket a $500 overall profit regardless of the game outcome.

We certainly took advantage of this deal along with many other bettors who grabbed at the opportunity. The only complaints we heard were from bettors who were not geared up with multiple bookie accounts or had slow payment methods and so were not able to get in before the offer was over subscribed!

Other Sports Betting Terms Explained:
>>Overround
>>Fixed Odds Betting
>>Asian Handicap Betting
>>Spread Betting

Sports betting odds are based on probability, reflecting the sportsbooks and bookmakers estimates of winning - but they also contain a margin to enable the bookie to make a profit if they get a balanced book.

This “margin” is called Vig, Vigorish, Juice or Overround and all these terms are taking about the same thing – the bookies “built-in” margin on the bets. Therefore it’s obvious that the lower the overround, the better the value in the market.

So how can you tell what the overround is in a market? Let’s work through a couple of examples :

In a handicap market for a European football match between Arsenal and Real Madrid, where both teams had an equal chance of winning (and the draw is refunded), without an overround they would both be fairly priced at even money or 2.00.

However, the bookies do not offer this price, instead they need a margin to make a profit and so they might only offer a price of 10/11 (1.91) on each team. A price of 1.91 reflects a 52.3% chance ( calculated as 1.00 / 1.91 = 0.523) and so the overround on this market would be around 105%. 

For US sports the simplest example is seen in the ATS bet (Against The Spread / handicap bet). Again if the spread was set correctly then without overround both sides prices would be around 2.00 (or +100 is US betting odds) – reflecting a fair price for a 50% chance.

But the effect of the “vig” (US slang for Overround) results in each of the sides usually being priced between 1.90 to 1.96 (depending on your bookmaker) rather than the 2.00

Many bookies will take around 10% margin from each market - however one of the most consistently sharp bookies (especially for US sports bets) is PinnacleSports where they only take out around a 4% margin rather than the 10% “industry standard”.

An underround can occasionally occur when you look at odds between bookies, say, if you could get 11/10 (2.10) on both teams. This is also called an arb. 

(Arbitrage - Where a variation in odds available allows a punter to back both sides and guarantee a win will be the subject of another Key Betting Terms Explained Blog soon).

>>GO TO Pinnacle Sports

>>Key Betting Terms Explained: Spread Betting 
>>Key Betting Terms Explained: Fixed Odds Betting
>>Key Betting Terms Explained: Asian Handicap Betting

Fixed-odds betting is the easiest to understand and by far the most popular form of betting. Its popularity stems from the fact that you know how much you can win, or indeed lose, when you place your bet.

In the UK, fixed odds betting traditionally uses Fractional odds (for example 5/1 = five to one, 15/2 = fifteen to two).

Use of Decimal odds (such as 6.00 or 8.50, the equivalent of 5/1 or 15/2 respectively) is growing in popularity in other countries and most good online sports bookmakers give you the choice of odds format to display.

Both Fractional and Decimal odds are simply ways of telling you how much you could win from your stake – and how likely it is you’ll be successful.

Odds of 5/1 (6.00) mean that your selection will win, in the bookies opinion, once in six attempts – 5/1 is short for “5 losses to one win”.

Your potential winnings are calculated by multiplying your stake by the odds.

The most straightforward kind of fixed odds bet is a single. You just pick a selection and put some money on it. If it wins, you win.

The next most obvious fixed odds bet is a double – you pick two selections and they both must win. The winnings from one bet are staked on the second. Say you bet £10 on two 5/1 (6.00) chances. The first one wins, so you get £60 back as shown earlier. This £60 is then your stake for the second bet – so if it wins you’d get back £60 x 5 plus your stake back, giving a total of £360.

You can also bet each way, where you put one bet on your selection to win and the same amount on it to be placed. If it’s placed, your first bet loses, but your second bet gets paid out at a fifth, a quarter or a third of the odds, depending on the bookie’s rules.

Links to Other Key Betting Terms Explained:
>>Spread Betting
>>Asian Handicap Betting

>>Visit BookieLabRat.com

Spread Betting is a betting style popular with UK punters and is offered by a limited number of specialist betting firms.

So what is spread betting?
The basic premise is that a spread betting firm such as Sporting Index, Hi/Lo, City Index, Cantor Index or IG Index predicts the outcome of an event and then offers a ‘spread’ based on that figure. (Spreads can be offered on sporting, financial or any other types of events)

You, the punter, then decide whether you think the result will be higher or lower than the spread firm’s prediction.

A cricket example is that the firm may predict that the Australian cricket team will score 245 runs, so they offer a spread of 240-250 runs (if the actual score falls between that range they win regardless – but they rarely get it bang on).

In this example, you have to decide if you think Australia will score more than 250 or less than 240. If you think more, then you ‘buy’ at 250 and stand to win 1x your stake for every run more than 250 that Australia makes. If you think they’ll score less than 240 runs, you ‘sell’ at 240 and win 1x your stake for every run short of 240.

The main thing to remember is that you always buy at the higher number in the spread and sell at the lower one.

If you predict wrong, you lose – in this example, 1x your stake for every run over 240 or under 250.  So if Australia actually makes 275, and you’d bought for a stake of £1 per run @ 250, you’d win £25. If you sold @ 240, you’d be losing money, and would lose a £ for every run you were out -£35.

Another aspect to spread betting is that the spread is constantly updated throughout the progress of the event. Prices are revised ‘in-running’ to reflect the current state of play. Say Australia reach 100 without loss. They’ll revise their spread upwards to say, 280-290 runs.

If you originally sold at 240 for £1 per run, you might be thinking you made a mistake, but there are ways to limit your losses – you can ‘close’ your bet by placing an equal-sized bet in the opposite direction. So now if you bought Australia for £1 per run at the latest spread of 290, you’d be taking a £50 loss – the difference between the spread you sold at 240 and the one you’re buying at 290. This would be admitting defeat, but you’d instantly know how much you’d lose.

For that to make sense, you’d have to now believe that Australia would score more than 290, because of they end up scoring fewer runs, you’d lose less than the £50 if you kept with your original bet and let it stand.

The reverse is also true. You can take a profit rather than leaving it to chance. If you originally bought Australia at 250, and the spread had been revised to 280-290, selling at 280 would guarantee a £30 win (again, the difference between the first and second spreads).

Here’s a Football Spread Betting example.

Say Arsenal is playing Man Utd and a spread on offer for the game has Arsenal with a goal superiority of 0.1 goals to sell, or 0.4 goals to buy.

This would be normally written 0.1 / 0.4 and means that when you buy at 0.4, if Arsenal wins by a goal, you’d be paid out at [(1-0.4) x your stake].  If Arsenal wins by 2 goals it would be [(2×0.4) x your stake].

Conversely if you didn’t think Arsenal would win you could have sold at 0.1.  So if the match was a draw you’d lose [(0.1-0) or 1/10th of your stake] but if Arsenal were beaten by a goal then you’d make (1.0-0.1) x your stake.

The settle-up of this spread where the stake was £10 is illustrated below.

In football spread betting the stake is usually not just £1 per goal (like the £ per run cricket example), but £10, £20 or £100 per goal and so can result in big wins – or big losses!

As winnings and losses can mount up quickly in spread betting, it’s advisable to bet only on events you understand (duh!), and then can keep a close eye on so you can cut your losses or take profits in-running.

NOTE:
As spread betting is only offered by a few companies the spread margins are fairly tight. In general punters can make a lot more money long term on fixed odds and/or Asian Handicap betting than on Spread bets when you consider the amount of risk involved.

>>Next Key Betting Term Explained: Fixed Odds Betting – coming soon!
>>Last Key Betting Term Explained: Asian Handicap Betting 

>>Visit BookieLabRat.com

Don’t be put off by the concept of Asian Handicap betting. If you bet on football you should at least understand all forms of betting available to maximise the earning potential and minimise the risk for each game. Successful betting is also about choosing the best betting style and then the right bookmaker.

I personally like Asian Handicaps because they remove the draw from the equation. This is an important consideration as a quarter of all football games end in draws.

Not all bookies offer Asian Handicaps, and as with all odds, it is well worth shopping around to get the best for Asian Handicaps. I run a stable of bookie accounts accordingly but three are outstanding in this area: MANSION Sports, Pinnacle Sports and Bet365. I recommend them personally - because I use them successfully myself.

Asian Handicaps - A Betting System to Even Up The Game
Asian Handicap is a form of betting where the perceived weaker team (or underdog) is given a number of goals head start. Conversely, the team perceived to be superior (the favourite) is penalised or ‘handicapped’ an equal number of goals in an attempt to make the two teams equal for betting purposes.

The favourite has to overcome the handicap, and will have it taken away from its final score. The handicap for the favourite is preceded by a minus (-). The underdog is given a ‘head-start’, and will have it added to its final score. The handicap for the underdog is preceded by a plus (+).

The wider the gap between the two teams, the greater the number of goals head start is given to the weaker team. If the two teams’ on-field ability is considered to be approximately equal, no handicap is given to either team.

Two types of Asian Handicaps - Single Handicaps & Double Handicaps

SINGLE ASIAN HANDICAP BETS : Example Brazil -1.0 v England +1.0

In this example, England has been given a 1 goal head start over Brazil. This means that all bets on England will win, provided England either win or draw the match. If Brazil wins the match by at least two goals, then all Brazil bets will win and all bets placed on England will be losers. If Brazil wins by exactly one goal with the -1.0 handicap the scores are considered level and all stakes will be returned.

The table below lists the most commonly used Handicaps and the outcome of each:

DOUBLE ASIAN HANDICAP BETS : Also known as Split or Quarter Ball Handicaps

Double handicaps are used to split a wager into two equal and separate bets – each with the same odds to win, but at a different single handicap. This can result in the following scenarios:

1. Both bets win, therefore the full win amount is returned.
2. One bets wins and one bet draws (stake returned). This is commonly referred to as ‘Half Win’.
3. One bet draws (stake returned) and one bet loses. This is commonly referred to as ‘Half Loss’.
4. Both bets lose, therefore the full stake amount is lost.

Ready to bet? For great football coverage and the BEST ASIAN HANDICAP ODDS on the Internet these three bookmakers are outstanding:

>> Visit Bet365 Bookmaker (sorry, no USA bettors)
>> Visit Pinnacle Sports Book (sorry, no USA bettors)

If you’ve still got questions contact us at BookieLabRat.com.