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Why bookmakers model betting behavior, not match probability
- adrienditta 7mo agoMost people think bookmakers try to estimate the true probability of a match and then add a margin. In practice, their real problem is predicting how people will bet. A simple coin-flip example shows why: Even with a 10% overround, if 80% of money lands on one side, the bookmaker becomes exposed to extreme short-term variance. Three consecutive popular outcomes can wipe out the theoretical edge. The article breaks down: – why money distribution matters more than probability – how emotional teams distort football markets – why positive expected value does not prevent bankruptcy Curious how people here see the analogy with market makers in financial markets. Full breakdown here: https://www.playaiodds.com/en/blog/money-made-on-public-bets https://www.playaiodds.com/en/blog/money-made-on-public-bets