How do I calculate the bookies advantage?

[stigmata]

Not sure if this question makes any sense or not...
How do I calculate the advantage to the bookie if, say, the odds were:

Home win: 1.44
Draw: 4
Away win: 7

[tech]

Can you rephrase your question? Do you mean that a home win pays 1.44 to 1, a draw 4 to 1, and an away win 7 to 1? I assume that I am interpreting this wrong, otherwise your bookie will be out of business quickly.

[CCx]

I dont think you're interpreting this wrong - the numbers listed are typical soccer odds when a strong home team is playing a weak team.

Example:

12/04/04 Arsenal 1.36
10:00 ET Tie 4.52
Birmingham 8.75

With straight odds like this, there's no real 'advantage', it's just like a moneyline bet in football. The only time a bookie has an advantage in a case like this is if he's screwing with the lines to avoid having to pay more on a heavily bet favorite (if he made Arsenal 1.25 or so, say) - but especially, ESPECIALLY with soccer lines always need to be shopped for best value.

[Iceman]

[ QUOTE ]
Not sure if this question makes any sense or not...
How do I calculate the advantage to the bookie if, say, the odds were:

Home win: 1.44
Draw: 4
Away win: 7

[/ QUOTE ]

Assuming you mean European style odds, where if you bet 100 euros on the away team and win, you get 700 euros back, not 800.

Add the following:

(1/1.44) + (1/4) + (1/7)

In other words, if you bet just enough on each of the possibilities that you would get the same amount back regardless of the outcome, this is that amount. Sometimes bookmakers have vastly different lines, and it's possible that this return can be over 100%.

[tech]

I think Iceman is correct. It makes sense with European-style odds, which I wasn't considering.

Otherwise, you could show an automatic profit simply by betting on all the outcomes with the proper bet sizes.

[Iceman]

Made a mistake there. It's actually

1 / ((1/1.44)+(1/4)+(1/7))

Basically, if you bet 1/1.44 on the home team, 1/4 on the draw, and 1/7 on the away team, you'll get a return of 1 regardless of the outcome. So the return 1 divided by the total bets (1/1.44)+(1/4)+(1/7) gives you the percentage paid out as a fraction of total money bet.

[Ed Miller]

Bet 69.4 (1/1.44) cents on home win
Bet 25 (1/4) cents on draw
Bet 14.3 (1/7) cents on away win

No matter what happens, the book will pay you 100 cents if you bet this way. The total bet is 108.7 cents... the extra 8.7 cents is the book's edge.

[maurile]

Iceman and Ed are both correct. Iceman is telling you that you're paid out 91.9708% of the amount wagered. In other words, the vig is 1 - 0.9197808 = 0.080292, or about 8 percent.

Ed is telling you that that you have to bet $1.087302 in order to ensure a payout of $1. So the house keeps 8.7302 cents. The percentage vig, then, is 0.087302 / 1.087302 = 0.080292. Same answer: about 8 percent.

The general way to figure out these types of problems is the following.

1. First, convert the odds into percentages (or fractions). E.g., if a team is a 3-1 underdog, then it has a 25% chance to win. If a team is even money, it has a 50% chance to win. And so on.

2. Add up all the percentages. If the bookie expects to make a profit, the total will be greater than 100%. Let's call it X.

3. The percentage vig will be equal to (X-1)/X.

In this case, the odds imply that the home team has a 69.4% chance of winning, there is a 25% chance of a draw, and the away team has a 14.3% chance of winning.

69.4444% + 25% + 14.2857% = 108.7302%

8.7302/108.7302 = 0.080292

That's a higher vig than the standard "bet 110 to win 100" (vig = 4.5455%) deal you'd find, for example, on American football games.

[stigmata]

Nice one, thanks for clearing that up everyone

[Crix]

I simply use my bank balance. Works every time for me. [img]/images/graemlins/grin.gif[/img] [img]/images/graemlins/grin.gif[/img]