Bookie Betting

Bookmakers on a greyhound race course, Reading, Berkshire
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A bookmaker, bookie, or turf accountant is an organization or a person that accepts and pays off bets on sporting and other events at agreed-upon odds.

Super Bowl betting generates the biggest handle of the year for most bookies. Sportsbook - An establishment that takes bets, also known as a book. An individual who takes bets is a bookie. Juice - This is the percentage of all bets taken by the bookie as profit. Us-bookies is dedicated to helping you know where you can bet online in the USA. Find honest sportsbook reviews and useful US betting bonus codes and offers available in YOUR state.

History[edit]

The first bookmaker, Ogden, stood at Newmarket in 1795.[1]

Range of events[edit]

Bookmakers in many countries focus on accepting bets on professional sports, especially horse racing and association football (soccer). However, a wider range of bets, including on political elections, awards ceremonies such as the Oscars, and novelty bets are accepted by bookmakers in some countries.

Operational procedures[edit]

By 'adjusting the odds' in their favour (paying out amounts using odds that are less than what they determined to be the true odds) or by having a point spread, bookmakers aim to guarantee a profit by achieving a 'balanced book', either by getting an equal number of bets for each possible outcome or (when they are offering odds) by getting the amounts wagered on each outcome to reflect the odds.[2] When a large bet comes in, a bookmaker may also try to lay off the risk by buying bets from other bookmakers. Bookmakers do not generally attempt to make money from the bets themselves but rather by acting as market makers and profiting from the event regardless of the outcome. Their working methods are similar to those of an actuary, who does a similar balancing of financial outcomes of events for the assurance and insurance industries.

Legality[edit]

Depending on the country, bookmaking may be legal or illegal and is often regulated. In the United Kingdom, since 1 May 1961, bookmaking has been legal and has even been a small contributor to the British economy, with a recent explosion of interest with regard to the international gaming sector industry. However, gambling debts were unenforceable under British law until the Gambling Act 2005. Many bookmakers are members of IBAS, an industry organisation used to settle disputes.

Bookmaking is generally illegal in the United States, with Nevada being an exception due to the influence of Las Vegas. In May 2018, a United States Supreme Court ruling struck down the Professional and Amateur Sports Protection Act of 1992, which prevented individual states from legalizing bookmaking.

In some countries, such as Singapore, Sweden, Canada, and Japan, the only legal bookmaker is owned and operated by the state. In Canada, this is part of the lottery programme and is known as Sport Select.

United Kingdom gambling industry[edit]

The first bookmaker in the United Kingdom is considered to be Harry Ogden, who opened a business in the 1790s, although similar activities had existed in other forms earlier in the eighteenth century.[3][4]

Following the Gaming Act 1845, the only gambling allowed in the United Kingdom was at race tracks. The introduction of special excursion trains meant that all classes of society could attend the new racecourses opening across the country. Cash flowed to the bookmakers who employed bodyguards against protection gangs operating within the vast crowds.[5] Illegal betting shops were fined, but some, like Bella Thomasson, ran betting businesses that the police appeared to turn a blind eye to.[6]

In 1961, Harold Macmillan's Conservative government legalised betting shops, with tough measures enacted to ensure that bookmakers remained honest. A large industry has grown since. At one time, there were over 15,000 betting shops. Now, through consolidation, they have been reduced to between 9,100 and 9,200 in 2013.[7] The group of the largest bookmakers in the country, known as the 'Big Three', comprises William Hill, Ladbrokes, and Coral.[8]

Improved TV coverage and the modernisation of the law have allowed betting in shops and casinos in most countries. In the UK, on-track bookies still mark up the odds on boards beside the race course and use tic-tac or mobile telephones to communicate the odds between their staff and to other bookies, but, with the modernisation of United Kingdom bookmaking laws, online and high street gambling are at an all-time high. A so-called super-casino had been planned for construction in Manchester, but the government announced that this plan had been scrapped on 26 February 2008.

Internet gambling[edit]

Although online gambling first started in 1994 when the licensing authority of Antigua and Barbuda passed the Free Trade & Processes Act, bookmakers did not get involved until 2001. They were forced to act when research at the time found there were eight million online players worldwide.[9]

With the arrival of the World Wide Web, many bookmakers have an online brand, but independently owned bookmakers often still maintain a 'bricks and mortar' only operation as the software and hardware required to operate a successful online betting operation are complex and their costs are quite prohibitive; other bookmakers operate 'skins' or 'white label' websites, which they purchase from one of the large firms. The main websites require bets to be from countries where Internet gambling is allowed and from people over 18 years old. Some small bookmakers and startups purchase software from specialised white label solution providers. Since gambling products have a high conversion rate from one niche to another, most online betting websites also feature other gambling products such as poker, live dealer casino games, lottery, bingo, slots and other casino games. Controversially, the explosion in Internet gambling is being linked to a rise in gambling addiction, according to the UK's help and advice organisations for addicts, GamCare and Gamblers Anonymous.

Increasingly, online bettors are turning to the use of betting exchanges such as Betfair and BETDAQ, which automatically match back and lay bets between different bettors, thus effectively cutting out the bookmaker's traditional profit margin also called an overround.

These online exchange markets operate a market index of prices near but usually not at 100% competitiveness, as exchanges take commissions on winnings. True wholesale odds are odds that operate at 100% of probabilistic outcomes.

Betting exchanges compete with the traditional bookmaker. They are generally able to offer punters better odds because of their much lower overheads but also give opportunities for arbitrage, the practice of taking advantage of a price differential between two or more markets. However, traditionally, arbitrage has always been possible by backing all outcomes with bookmakers (dutching), as opposed to laying an outcome on an exchange. Exchanges, however, allow bookmakers to see the state of the market and set their odds accordingly.

With the increasing number of online betting exchanges, betting exchanges are now providing free bet offers in an attempt to lure customers away from the competition. These free bets are generally based on the size of the deposit made into the gambling account. For example, if a customer made a deposit of $20, the betting exchange would deposit an additional $20 for the customer to use.[10] Free bet rules vary depending on the betting exchange.

Some bookmakers have even taken to using betting exchanges as a way of laying off unfavourable bets and thus reducing their overall exposure. This has led to insecurity from some TABs in Australia, state-run betting agencies that attempted to deny Betfair an Australian licence by running unfavourable ads in the media regarding the company. When Tasmania granted Betfair a licence despite these efforts, the Western Australian state legislature passed a law that specifically criminalised using betting exchanges from within the state; however, the law was later ruled to be unconstitutional. As a result, internet gambling in Australia required a new legal framework. The Interactive Gambling Act 2001 regulates the online gambling market in Australia, together with all its amendments. The last amendment was introduced on 13 September 2017. This bill states that online casinos, online poker and live betting is illegal in Australia. The Australian Communication and Media Authority (ACMA) is the regulatory body that is in charge of all supervising online gambling activities. Online sports betting is legal, however.[11]

Bets are also taken via phones, using email and SMS text messages,[12] though poker and other sports are more suited to other media. As technology moves on, the gambling world ensures it is a major player in new technology operations.

Betting

Most televised sports in the United Kingdom and the rest of Europe are now sponsored wholly or partly by Internet and high street bookmakers, with sometimes several bookmakers and online casinos being displayed on players' shirts, advertising hoardings, stadium signs and competition event titles. Sponsors are especially highlighted in the football category since football fans present a significant percentage of the target group the bookmakers serve.

Many of the bookmakers are sponsoring some of the major football teams in the major European football leagues,[13] although Werder Bremen are currently fighting the German courts for the freedom to continue featuring bookmaker Bwin on their shirts, as Germany and France take action against online gamers. For example, as of 1 January 2020, Germany bettors will not be able to bet more than €1,000 a month. The latest amendment of the ITG states that. New online sportsbook laws are expected in the near future in Germany, as this law is only temporary: the expiration date is set to be on 20 June 2020.[14]

The situation is not that strict in France, however. Online sports betting in France is divided into two sections: Autorité de Régulation des Jeux en Ligne (ARJEL) regulates online sports betting, while online horse betting is regulated by the law 'Decree 2010-498 from 17 May 2010. International bookmakers are allowed to enter the French market, thanks to the Law No. 2010-476 from 12 May 2010.[15][16]

With the recent banning of tobacco sponsorship[17] and the significant commercial budgets available to the gaming industry, sponsorship by car manufacturers, alcoholic drinks, soft drinks and fast-food marketers is being rapidly replaced by sponsorship from gaming companies in the Far East and Europe.

The United Kingdom's Gambling Act 2005 introduced a new regulatory system for governing gambling in Great Britain. This system includes new provisions for regulating the advertising of gambling products. These provisions of the Act came into effect in September 2007. It is an offence to advertise in the UK, gambling that physically takes place in a non-European Economic Area (EEA) or, in the case of gambling by remote means, gambling that is not regulated by the gambling laws of an EEA state. The Gambling Commission is the body that makes sure all sites and operators follow the new restrictions. In addition to the Gambling Act of 2005, according to the new gambling bill, online gambling sites are only allowed to offer services within the United Kingdom, if they are registered at the UK Gambling Commission.[18]

The situation is more confused in the United States, which has attempted to restrict operators of foreign gambling websites accessing their domestic market. This resulted in 2007 in a ruling against the US government by the World Trade Organization.[19] However, common online gambling laws in the United States still don't exist - it differs from state to state. All forms of online gambling are illegal within the states of Utah and Hawaii, while the states of Delaware, Pennsylvania and New Jersey took a different approach: almost all forms of online gambling are legal in these states. These are the only US states where online casino sites can be legally registered. It is important to mention that Native Americans have their own gambling legislation - the Indian Gaming Regulatory Act of 1988. However, they need their state's approval in order to be able to offer their services online.[20]

See also[edit]

  • Bookies – a German film

References[edit]

  1. ^Barrett, Norman, ed. (1995). The Daily Telegraph Chronicle of Horse Racing. Enfield, Middlesex: Guinness Publishing. p. 10.
  2. ^Cortis, Dominic (2015). 'Expected Values and variance in bookmaker payouts: A Theoretical Approach towards setting limits on odds'. Journal of Prediction Markets. 1. 9.
  3. ^Munting, Roger (1996). An Economic and Social History of Gambling in Britain and the USA. Manchester University Press. p. 89.
  4. ^Vamplew, Wray; Kay, Joyce. (2005). Encyclopedia of British Horseracing. Routledge. p. 50.
  5. ^Dick Kirby, The Race Track Gangs, The Peeler issue 7 July 2002, 'Friends of the Met Police Museum'
  6. ^'Thomason, Ann Arabella [known as Bella Thomasson] (1874–1959), bookmaker'. Oxford Dictionary of National Biography. doi:10.1093/ref:odnb/56685.
  7. ^Gambling Commission Gambling industry statistics April 2009 to September 2012
  8. ^Vamplew and Kay, p. 51.
  9. ^'A history of online casinos: infographic'. rightcasino.com.
  10. ^'The Most Common Sportsbook Bonus Types'. Retrieved 24 August 2014.
  11. ^Communications. 'Interactive Gambling Act 2001'. www.legislation.gov.au. Retrieved 4 September 2019.
  12. ^'Betfred.com Chooses OtherLevels' Platform to Power Their Mobile Marketing Campaigns'. Market Watch. 28 July 2014. Retrieved 24 August 2014.
  13. ^'A Look At Bookmakers Sponsoring Football Clubs'. ReliableBookies.com. 19 March 2013. Retrieved 19 March 2013.
  14. ^'Entwurf eines Dritten Staatsvertrages zur Änderung des Staatsvertrages zum Glücksspielwesen in Deutschland (Dritter Glücksspieländerungsstaatsvertrag)'(PDF). Landtag Nordrhein-Westfalen.
  15. ^LOI n° 2010-476 du 12 mai 2010 relative à l'ouverture à la concurrence et à la régulation du secteur des jeux d'argent et de hasard en ligne (1). Legifrance. Retrieved 4 September 2019.
  16. ^Décret n° 2010-498 du 17 mai 2010 relatif à la définition des courses hippiques supports des paris en ligne et aux principes généraux du pari mutuel. Legifrance. Retrieved 4 September 2019.
  17. ^Holman, C D'Arcy; Donovan, Robert; Corti, Billie; Jalleh, Geoffrey; Frizzell, Shirley; Carroll, Addy. 'Banning tobacco sponsorship: replacing tobacco with health messages and creating health-promoting environments'. The British Medical Journal. Retrieved 24 August 2014.
  18. ^'The Gambling (Licensing and Advertising) Act 2014'. UK Gambling Commission. Retrieved 4 September 2019.
  19. ^'WTO rules against US gaming ban'. BBC News. 30 March 2007. Retrieved 1 September 2011.
  20. ^'Public Law 100-497-OCT. 17, 1988: An Act to regulate gaming on Indian lands'(PDF). Government Publishing Office [US]. Retrieved 4 September 2019.
Retrieved from 'https://en.wikipedia.org/w/index.php?title=Bookmaker&oldid=1010231995'

The odds you get at a bookmaker represent the chance of your bet winning. And sometimes, just sometimes, the bookies get it wrong allowing smart punters to get great value. This is the essence of value betting.

Value betting was the final and most profitable step of my eight-year career as a professional gambler. I started with Matched Betting, moved to Casino Bagging, then on to Sports Arbitrage and finally to value betting.

Warning: Before we start let me be very clear. This is an advanced guide. Value betting is profitable and mathematically sound. But it is not risk-free. Even when done right you can be unlucky and lose money. If you are new to profitable gambling start with matched betting instead. It is much easier and risk-free. And never use money you can’t afford to lose.

The first part of this guide will be on explaining what exactly is value betting. The second part is on the different types and how to find value.

Contents

  • 1 What Is Value Betting?
  • 2 Two Types Of Value Betting
  • 3 Is Value Betting For You?

What Is Value Betting?

Very simply, value betting is placing bets when the bookmaker has priced their odds too cheaply. This happens when the odds on offer reflect a lower probability of the event happening than the true probability. The bookie has priced their odds cheaply, leaving an opportunity that will make the bettor money in the long run.

How Do Odds Work?

Let me explain in more detail. The odds you see at a bookmaker represent the probability of the outcome happening. The bookie wants to make money so will calculate the probability and then offers odds that are slightly worse. This is the essence of running a bookie – decide what you think the chance of the event happening is and then price your odds so you will make money. If you do that over every outcome of an event you have “made a book”.

Here are some odds on a tennis match at Ladbrokes:

Note: for fractional odds (like above) you can work out the implied probability by: denominator / (denominator + numerator) * 100. For decimal odds (not shown but also a common way to bet) you just take the inverse and multiply by 100.

In the tennis match above there are only two possible outcomes so the probability should add up to 100%. But it doesn’t, the bookmaker has created odds that add up 107.6%. This percent above 100% is known as the bookies overround and is the ‘book’. It is how they make their money.

When Is There A Value Bet?

If we knew that the true probability of Ulises Branch winning was higher than 47.6%, then betting on him at odds of 11/10 would now be a value bet. Over the long term, we would make money taking such bets.

Still don’t quite get it? Ok let’s go for a very simple example.

Bookie

Let’s say we are betting on a coin flip. The true odds of heads coming up is 50%. So the true odds are evens (1/1 in fractional odds).

If someone was stupid enough to offer us 2/1 odds on heads coming up I would take that bet all day every day.

If we played 20 games and heads came up 10 times, and tails came up 10 times I would win £20 and lose £10. Leaving me with £10 profit.

A value bettor’s job is to work out the true probability of an event happening. And then find bookmakers who have got it wrong.

But Beware Of Variance

In the above example of the coin flip, I might get unlucky. Tails could come up and I would lose £1. But that doesn’t mean it was a bad bet. In fact it was a very good bet and I would take it again. And the more I took that bet the more likely I will make money overall.

Here are my real life value betting results over a 12 month period. This is using the second type of value betting that you will read about later.

The light blue line represents daily profit. And the dark blue is the 2-week average. I was placing hundreds of bets a day and there were some days where I got unlucky and lost money. But over the long term those losing days evened out and I never had a two week period where I was down overall.

The more you bet the more even your outcome will become.

Two Types Of Value Betting

There are two ways professionals generally make money from value betting. One (what I call fundamental) is to become an expert in a particular sport and create your own odds, and then when you think the bookie has got it wrong you bet. The other (what I call technical) is to use maths and logic to work out what the market thinks the true odds are, and then bet with bookies who disagree with the market.

1 – Fundamental: Being An Expert On Form

This is the traditional way to make money as a professional sports punter. And is also the type of value betting I have the least experience with. I will freely admit that I am not an expert in any particular sport and would not want to pit my knowledge against the bookies. I would lose.

To make money using fundamental value betting, you need to know a lot about the sport and also how to create odds. You are effectively becoming a bookmaker yourself but taking bets from other bookies rather than from punters.

And in fact going from a professional better to opening a bookmaker is a pretty well-trodden route. If you go to a horse racing track and talk to the small independent bookmakers there you will find that quite a few used to be professional punters. But eventually realised it was much easier to take bets from regular punters than the professionals.

There are plenty of fundamental value bettors but they are often very secretive and will only reveal their secrets after they retire. Until then do not want anyone else competing for the odds they have found and they really don’t want the bookie working out they exist.

What About Tipsters?

At this point I am often asked about tipsters. People who for a fee will give you tips on value bets.

Again they do exist. Good tipsters are often people who used to just bet for themselves but are now banned at most bookies. And even at betting exchanges like Betfair where they don’t ban, they do have premium charges that can make it not worth betting anymore.

This is something I experienced myself when trading on Betfair. Here is the email I received for making too much money at Betfair and getting hit with the premium charge. Bittersweet.

But finding a good tipster is very difficult. Most are amateurs and 9/10 tipsters will lose money in the long run. If you find a good one you want to hold on to it and not tell anyone.

While preparing for this article I asked a friend who makes a living following tipsters for any advice. He wouldn’t tell me exactly which tipster he uses, but he did recommend using a marketplace such as Betting Gods that is impartial and you can see the historic results of a tipster before you commit.

Now on to the stuff I actually do know a lot about.

2 – Technical: Using Technology & Market Data

I may not be an expert in sport, but I am an expert in how the betting markets work and the psychology of a bettor.

Sometimes Bookies Will Disagree With Each Other

There are a lot of different bookmakers and betting exchanges. And all of them have slightly different odds. If two or more start to really disagree and their odds separate then a situation can occur where you can bet on all outcomes and lock in a profit. We call these arbitrage opportunities.

You may already be familiar with arbing or sports arbitrage. If not you can read my full post on arbitrage here.

Now let’s take that concept of bookies disagreeing a step further. When two bookies disagree it normally means that one is right and the other is wrong.

If you can work out which bookie has the cheap odds and only place that bet, you are now value betting.

Whenever there is an arbitrage bet there is also a value bet

But it gets better. And here is the secret that converted me from arbing to value betting. When you place an arbitrage bet you are paying a commission to the smart bookie.

So by value betting instead you are saving on that commission. And you will increase your return on investment.

For reference when I went from arbing to value betting. My return on investment average went from a little under 3% to over 7% of turnover.

Below is a chart showing my profit from value betting vs what I would have made if I had only placed hedged arbitrage bets. This covers the same data as the value betting chart in the previous section.

Now bear in mind I was placing hundreds of bets a day which is why the variance is almost unnoticeable over the 12-month period. Some days, or even some weeks, were losing periods. Wheras with arbitrage there are no losing periods. But in the long run value betting made much more money.

But it goes even further than just increasing your return. Because there are certain situations where there is not a profitable arbitrage bet but there is a value bet. Situations where the difference between bookies isn’t big enough to create an arbitrage opportunity, or there isn’t a liquid enough marketplace for arbitrage. But you can still place value bets.

How do you know which bookie is weak?

Ok so you understand the logic? Now on to the most important question. How do you know which bookie is in the wrong. Which one has the value bet.

Generally there are some tells I look for. And they do change over time and there are special circumstances. So make sure to do your own research and understand why.

Here is a basic hierarchy to get you started:

  1. Marketplaces such as Betfair are normally more accurate than traditional bookies. If a bookie disagrees with Betfair they are probably wrong.
  2. If one bookie disagrees with everyone else, they are probably wrong.
  3. Popular markets are more likely to be right than less popular ones.
  4. Asian bookmakers are normally sharper than European.

If you want a simple place to start it is pretty safe to assume that any bookie who disagrees with Betfair is wrong.

Bookie Betting

Find Value Bets Using Arb Finders

One option is to use a normal arb finding service (I recommend my favourite sports arbing software in this article). And then work out which side of the bet has the value and place the bet on that. In matched betting circles they will often describe this habit as “not laying”.

In the below screenshot I have gone to the Oddsmonkey oddsmatcher and filtered it to show only matches involving Betfair. None of the matches that are shown are arbitrage bets, because the commission you would pay at Betfair would remove any of your profit. But they are value bets.

But traditional arb finding software isn’t designed with value betting in mind. Blitz blackjack. So a better option is to find a dedicated value betting service that works off the technical principles I have described here.

Find Value Bets Using Value Betting Software

Up until a few months ago there were no public services available. The value betting I was doing in my screenshots were all from software we designed ourselves (I studied computer science at university and my masters’ dissertation was on sports arbitrage and value betting).

But recently Rebel Betting (one of the big names in arb finding) have released their value betting service*.

When it came out I was a bit sceptical because I wanted to know exactly how they calculate what is and isn’t a value bet. So I had a long talk with Simon, the founder, and was convinced that they were following pretty much the same philosophy that I was using and recommend here.

I also asked Simon if he would create a discount code or voucher for Rebel Betting. And he was kind enough to create a deal. If you click this link* you will get a “buy one month get one free” exclusive offer to readers and listeners of my podcast.

So you get 2 months for €49. I assume the price will go up at some point as that is really cheap compared to their standard arb finder which €129 a month.

Simon also offered me a refer-a-friend bonus so if you sign up I’ll also earn a bit of money. Win win.

Here are the results of one of their beta testers Mike:

My Bookie Betting

As you can Mike’s does have losing bets. But the variance evened out pretty quickly.

Is Value Betting For You?

Value betting is great and has made me a lot of money. But it does have its downsides. And there is a reason why this is the first time I have spoken about it in detail on this blog.

While value betting is mathematically sound, it also can easily resemble normal betting and has some of the same psychological quirks. With arbitrage or matched betting you know the outcome before placing the bet and so are protected from the swings and adrenaline rushes of betting and risking real money. Not so with value betting.

With value betting luck does come in to play. You can be lucky and make loads of money, but you can also be unlucky and have a few days or weeks down. And I have heard too many stories of value bettors seeing red and and going on a tilt. Betting too much or deciding that they know better than the software and placing their own bets.

It gets even harder when you use the fundamental version value betting (the first method we spoke about) and don’t use software but try and create your own odds. How do you know if you are right or just lucky? And likewise how do you know if you are unlucky or just bad at fundamental value betting?

So I would say, don’t try value betting if you have an addictive personality. Or if you are an adrenaline junkie. Or if you can’t afford to lose the money.

And I would also say that if you are just starting out with profitable gambling. Then value betting is not for you. Ease yourself in with matched betting. Then once you have built up a bank of experience and money you can do some value betting.

So there we have it. I know this is a complicated topic which I have tried to simplify as much as possible, so if you have questions please post in the comments below and I will do my best to answer.

Bookie Betting Tips

I have also recorded a podcast on the same question (what is value betting), so you may want to listen to that as well.

Listen to episode 33 of the Lazy Entrepreneur Podcast: Value Betting.

Bookie Betting App

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