How Do Online Sportsbooks Calculate Odds

This tends to be quite a common question among possible yet-to-be bookies and new sports betting enthusiasts.

Although this is a rather simple question with a relatively simple answer, it also leads into one of the main problems many gamblers face when betting through online sportsbooks.

The reality is that most online sportsbooks don’t set their odds, they copy them from a few that actually take the time to determine these.

Now you’re probably wondering, so how do those online sportsbooks that do determine the initial odds and lines calculate the starting point?

Well, what they do is pretty much determine the possibilities of success for each team (just like a gambler would) by taking into account several variables and then figure out the sentiment that gamblers are showing towards that event. Since odds and lines are meant to distribute wealth “equally” between both sides of the bet – so the losing side covers the earnings of the winning side and leave the online sportsbook profiting from the “juice” – understanding what gamblers think (even if this is different from the projected results after a lengthy analysis) is essential to set the opening odds/lines.

After that odds/lines will move differently on each online sportsbook depending on which side of the bet is attracting more attention in their venue – remember, the idea is to distribute wealth equally; so if there is a sudden loss of balance between both of these, odds/lines are adjusted to drag more players to the less attractive side of the bet.

And this is where one of the biggest confusions in the sports betting world happens.

Many gamblers know that online sportsbooks (or tangible ones) need to take into account probability, but what they refuse to acknowledge is that the odds are not equal to that probability. Many people still believe that because the online sportsbook is setting a certain team to be the favorite for quite a bit of points, it must mean that they are probably going to trash the other team(resulting in an easy victory).

That’s not true, but many people who are new to the world of sports betting (or have never taken the time to study how things work in order to improve performance and have a better win-lose ratio) believe so.

Now, you’re no longer in that group even if you were a moment ago. The fact that you took some time to figure out how are online sportsbooks setting up their odds and lines is enough to be considered one of the few gamblers that care about winning instead of betting for the sake of gambling.

So when you bet next time, just remember that online sportsbooks odds/lines are not equal to probability, and they don’t really care who wins, but who does the general audience think will win. In other words, the underdog might actually be the favorite in statistical probability, but because the audience favors the other team, that’s it.

Author’s G+: Seth Miller.

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