3 ms·

The bookies' entire business model is to have a better clue than anyone else about what the accurate pricing would be. If they fail at that, they don't stay in

by philh 11y ago

The bookies' entire business model is to have a better clue than anyone else about what the accurate pricing would be. If they fail at that, they don't stay in business for very long.

corin_ 11y ago
Only to an extent, ask anyone who's actually worked setting odds for a major bookies (not an area I'm massively familiar with but I've given odds makers the info they used to create prices for markets a few times) and they'll tell you that the company doesn't require them to be bang on every time. Once a market is getting enough action, all they need to do is algorithmically adjust the odds to fit around the bets, and let the house edge do the rest. So essentially if everyone is betting big money on Britain leaving, they will adjust the odds such that that becomes the favourite. Having accurate pricing means that there'll be less margin of error to compensate for in odds changing, and means they (the bookies) are safer against big losses that could have been avoided, so for sure they do their best, but in this case I'd be shocked if doing their best wasn't just taking a combination of what the polls say and what their own betting stats show and merging them together (and while merging in their betting stats will help them set odds that make sense for them, it doesn't help improve the polls' chances of being accurate).
Lio 11y ago
Isn't a bookie's business model based around laying off one side of a bet against the other rather than predicting the future? When you win at long odds, in a perfect system, it's not the bookie's money you're taking it's a share of money collected from the punters who bet on the favourite (minus the bookmaker's margin). The bookie shouldn't care what's likely to happen or not, their pricing should be based on the collective opinions of the punters, right or wrong. > So how does a bookmaker set his original odds? We mentioned before that most of > the early bookmakers will have a number of experts in each sport and they will > come to a decision as to the opening prices. However, it is important to note > that the odds they set are not based on the true probability of the teams > winning, but rather what the general betting public perceive the true > probability to be. https://betting.betfair.com/the-art-of-bookmaking.html https://betting.betfair.com/the-art-of-bookmaking.html

by philh 11y ago

The bookies' entire business model is to have a better clue than anyone else about what the accurate pricing would be. If they fail at that, they don't stay in business for very long.

corin_ 11y ago

Only to an extent, ask anyone who's actually worked setting odds for a major bookies (not an area I'm massively familiar with but I've given odds makers the info they used to create prices for markets a few times) and they'll tell you that the company doesn't require them to be bang on every time. Once a market is getting enough action, all they need to do is algorithmically adjust the odds to fit around the bets, and let the house edge do the rest. So essentially if everyone is betting big money on Britain leaving, they will adjust the odds such that that becomes the favourite. Having accurate pricing means that there'll be less margin of error to compensate for in odds changing, and means they (the bookies) are safer against big losses that could have been avoided, so for sure they do their best, but in this case I'd be shocked if doing their best wasn't just taking a combination of what the polls say and what their own betting stats show and merging them together (and while merging in their betting stats will help them set odds that make sense for them, it doesn't help improve the polls' chances of being accurate).

Lio 11y ago

Isn't a bookie's business model based around laying off one side of a bet against the other rather than predicting the future? When you win at long odds, in a perfect system, it's not the bookie's money you're taking it's a share of money collected from the punters who bet on the favourite (minus the bookmaker's margin). The bookie shouldn't care what's likely to happen or not, their pricing should be based on the collective opinions of the punters, right or wrong. > So how does a bookmaker set his original odds? We mentioned before that most of > the early bookmakers will have a number of experts in each sport and they will > come to a decision as to the opening prices. However, it is important to note > that the odds they set are not based on the true probability of the teams > winning, but rather what the general betting public perceive the true > probability to be. https://betting.betfair.com/the-art-of-bookmaking.html https://betting.betfair.com/the-art-of-bookmaking.html