bookmaking - is there a science to it?

The latest Journal of Prediction Markets features an article looking at ' Does Sportsbook.com Set Pointspreads to Maximize Profits? Tests of the Levitt Model of Sportsbook Behavior'

Looks like an interesting read but can't see myself paying $40 for the privilege.

Amongst their findings:

Abstract:
The Levitt (2004) model of sportsbook behavior is tested using actual percentages of dollars bet on NFL games from the internet sportsbook, Sportsbook.com. Simple regression results suggest that Sportsbook.com sets pointspreads (prices) to maximize profits, as the Levitt model assumes, not to balance the betting dollars, as the traditional model of sportsbook behavior assumes. Sportsbook.com is found to accept significantly more wagering dollars on road favorites, larger favorites, and on the over for the highest totals in the over/under betting market. Bettor liquidity constraints and sportsbook betting limits may help explain this result.

All sounds pretty logical to me - if there's ever a time you want to take on a favourite, it's when they are away from home. On stronger (larger) favourites, then the risk is far less anyway and mug punters love the overs so the smarties are generally on the unders. Not rocket science, but worth learning how and where bookies try to make money from punters.

Here's the link

Comments

It's all gone Pete Tong at Betfair!

The Christmas Hurdle from Leopardstown, a good Grade 2 race during the holiday period. But now it will go into history as the race which brought Betfair down. Over £21m at odds of 29 available on Voler La Vedette in-running - that's a potential liability of over £500m. You might think that's a bit suspicious, something's fishy, especially with the horse starting at a Betfair SP of 2.96. Well, this wasn't a horse being stopped by a jockey either - the bloody horse won! Look at what was matched at 29. Split that in half and multiply by 28 for the actual liability for the layer(s). (Matched amounts always shown as double the backers' stake, never counts the layers' risk). There's no way a Betfair client would have £600m+ in their account. Maybe £20 or even £50m from the massive syndicates who regard(ed) Betfair as safer than any bank, but not £600m. So the error has to be something technical. However, rumour has it, a helpdesk reply (not gospel, natur

Betdaq.... sold...... FOR HOW MUCH???

So as rumoured for a while, Ladbrokes have finally acquired the lemon, sorry, purple-coloured betting exchange, Betdaq. For a mind-boggling €30m as 'initial consideration'. That's an even more ridiculous price than Fernando Torres for £50m, or any English player Liverpool have purchased in recent seasons! As I've written previously there are no logical business reasons for this acquisition. from Nov 29, 2012 The Racing Post reported this week that Ladbrokes are nearing a decision to acquire Betdaq. This baffles me, it really does. Betdaq are a complete and utter lemon. Their only rival in the market has kicked so many own goals over the years with the premium charge, followed by an increase in the premium charge, cost of API and data use, customer service standards which have fallen faster than Facebook share value, site crashes and various other faults. So many pissed off Betfair customers, yet Betdaq are still tailed off with a lap to go. Around the world, Betfair

lay the field - my favourite racing strategy

Dabbling with laying the field in-running at various prices today, not just one price, but several in the same race. Got several matched in the previous race at Brighton, then this race came along at Nottingham. Such a long straight at Nottingham makes punters often over-react and think the finish line is closer than it actually is. As you can see by the number of bets matched, there was plenty of volatility in this in-play market. It's rare you'll get a complete wipe-out with one horse getting matched at all levels, but it can happen, so don't give yourself too much risk...

Sport is made for betting

Search This Blog