Week 4: Some Statistics Regarding Sports Betting

Here we go, Week 3 of my project is underway, and I cannot be more excited. This week was another informative and interesting one, as I learned more about statistical use in sports betting. I was able to take everything that I have learned about thus far, and provide this project with a more mathematical state-of-mind. In doing so, I accomplished my goal for the week: learning about how math and, more specifically, statistics, works in sports betting and gambling in general.

This week was another extremely interesting and educational one! It was very insightful for me to relate the things I have learned about sports betting to what I already know about math and statistics. Furthermore, I was even able to learn more about stats than I already knew, particularly regarding how they are used in gambling. As previously mentioned in Week 2, there are countless terms associated with sports betting and gambling in general. One concept that is particularly crucial for a bettor to understand is “odds”, which are displayed differently based on the sport and location you’re betting on. To review, there are three ways in which odds can be displayed. If you’re chance of winning is 33.33% (for example): American Odds are +200, Fractional Odds are ½, and Decimal Odds are 3.00. Either way, every $1 that is wagered will yield a profit of $2, if successful. For American Odds, a negative number tells you how much you need to risk to profit $100 (i.e., -140 means if you successfully wager $140, you will receive $240 in return). Fractional Odds always display the payout/wager as a fraction (i.e., a team having odds of 1/5 will see a payout of just $1 for every $5 bet). Lastly, Decimal Odds provide an exact number that is payed out per $1 bet (i.e., 2.5 means a $1 bet will yield $2.⁵⁰).

Bookmakers use Las Vegas Odds as a benchmark, meaning there’s less variation between gambling venues across the world. Offering odds that are much better for players than Vegas Odds will attract more gamblers, but can also be disastrous if there’s a big upset (Online Gambling, 2020). This also means that Vegas Odds are built to generate a profit for “the house”; this is why they say “the house always wins”. Most Bookmakers use their own teams to calculate odds based on various criteria, from the location of the match and the weather, to player absences or injury risks. Odds change quickly, as Bookmakers update them while events are in-play. They will also use Vegas Odds as a benchmark for their own calculations, which can influence the variety of odds they offer gamblers.

Another important number that I came across is that a bettor would need to win 52.38% of their bets just to break even, because of Bookmakers’ commission! The commission is the percentage that bookmakers take out of betting odds in order to take their cut of the action, regardless of the outcome of an event. This ensure a profit for the Bookmakers because every time you bet, you are sacrificing a portion of your winnings (or losings) to them (Sports Betting Day, 2020). One example of this, which I have realized in my own experiences, occurs when prop betting in hockey. If you bet on the winner of the opening face-off in hockey, you would think this would be a 50/50 bet – the odds of either side winning are 50%, like flipping a coin and landing on heads or tails. Even though this is the case, the odds (and more importantly, the payout) do not reflect this outcome! Because Bookmakers need to make commission and profit, the American Odds of one team winning the opening face-off over the other are more like 1.85, or -185, for both sides. This means that both teams are the favourite, ensuring that a bettor would never make more money than they have wagered! This is important to teach adolescents because even if they think they may be winning, the “house” is still coming out on top!