Being the bookmaker

Ok, so the title is a little inaccurate, but for most people laying the bet is similar to acting as the bookmaker, though as we are not actually making a book we aren’t technically being a bookmaker.

Anyway, last time I said that just laying the no hopers wasn’t perhaps the best quick and easy option to making money it may seem at first.  To try and explain this I shall make up a fictitious book with 6 selections.

Team	Odds
New York Rangers	1.10
Toronto Maple Leafs	1.25
Sheffield Steelers	15
Guildford Flames	50
Fife Flyers	100
Nottingham Panthers	250

Anyone familiar with ice hockey will recognise the teams above and know that either New York or Toronto would easily win this league, but which of those two it will be is a little less certain, so we decided to lay the other four teams knowing they have no chance (if you don’t know anything about ice hockey trust me on this).

On the betting exchange some people are taking a wild punt and they are wanting to back Sheffield, Guildford, Fife and Nottingham. This is important, on betting exchanges bets must be matched, so if you want to lay a bet for a certain amount at certain odds, there must be someone (or people) wanting to back the bet at the same amount and odds.  If you tried laying Nottingham at 2.5, it wouldn’t get matched while people can get odds of 250.  Think about it, would you back a team at 2.5 if you could get 100 times that!

So we lay £1 on Sheffield, Guildford, Fife and Nottingham. So if Sheffield win we lose £15, Guildford £50, Fife, £100 and Nottingham £250.  As only one team can win we don’t need to cover all these liabilities combined, just the biggest one.  So for this we need to have £250 in our betting bank and the most we can win is £4.  That £250 is then tied up until the league is over.

So you can see the problem, to lay things like this requires a much larger betting bank that I am using for this experiment.  However, if you are using a much larger bank, it is worth thinking about this as an additional option to help increase your returns.  With this example it is about the same as backing at odds of 1.02, pretty common for what I have been doing in this experiment.  So if you have a bit more to play with, you can make steady if unspectacular long term returns with very little risk.

Hopefully this gives you a bit of an insight in to betting exchanges. I plan on coming back to them at a later stage, as they present some very good opportunities for making money, which don’t form part of this experiment, but could be used in another experiment at a later date.

When is a bookmaker not a bookmaker?

If you have been following the blog, you will know that for the recently I have been using oddschecker.com to see if the odds I am getting are the best available.  What I noticed is that certain bookmakers were consistently offering the best odds for many of my bets, one being Betfair.

Unlike most of the others, Betfair (and others such as Betdaq) are not traditional bookmakers, they are betting exchanges.  So what is the difference.

First, there are two terms to be familiar with, back and lay.  If you back something you are betting on that out come taking place. For example if you back Manchester Utd to win a football match you win the bet if they win.  If they lose or there is a draw you lose the bet.  If you lay Manchester Utd to win, you are betting against a Manchester Utd win.  So if they do win you lose, but if there is a draw or they lost you win the bet.

With a traditional bookmakers, you and me always back a selection and the bookmaker always lays the selection.  With a betting exchange you are betting with other people not a bookmaker and can choose to either back or lay a selection. 

Brilliant, so you can now lay everything that doesn’t have a chance of winning and make easy money, if only it was that easy.  I’ll explain why it probably isn’t the easy winnings it may appear on first inspection another time.

Quick update

Its been nearly two weeks since I last posted, so just a quick update on how things are going.

Things hit a slight stumbling block with a couple of losses recently but I was still left in a positive position overall.  As I write this, I am £2.45 up, but I still have two bets open so could lose £2.  That would still leave me in a positive position overall, so I can’t really complain too much with how things are going so far.

Don’t forget, you can keep track of the bets I have placed by clicking the ‘My bets’ link on the left.

Best odds

A few weeks ago I said I would be tracking the odds at other bookmakers using www.oddschecker.com to see if I could get better returns on any of my bets.  The odds show are at the time I place my bets.  Here are the results.

Bet	My Odds	Best Odds	Worst Odds
Tennis - Verdasco beat Lapentti	1.14	1.18 (Betfair)	1.11 (Bet365)
Tennis – Azarenka beat Navarro	1.33	1.33 (Sporting Bet, Bet Fred, 888, BlueSQ, Coral, William Hill, Betfair)	1.29 (Stan James, Boyle Sport)
Tennis – Dementieva beat Groenefeld	1.12	1.14 (Betfair)	(1.07 Bet Fred)
Tennis – Safina beat Errani	1.14	1.24 (Betfair)	1.09 (Betdaq)
Ice Hockey – Czech Rep. beat Norway	1.04	1.05 (Expekt, Ladbrokes, Betfair)	1.02 (Boyle Sports, Paddy Power)
Ice Hockey – USA beat Austria	1.05	1.09 (Betfair)	1.03 (Sporting Bet)
Ice Hockey – Finland beat Denmark	1.04	1.07 (Betfair)	1.02 (Paddy Power)
Ice Hockey – Sweden beat Latvia	1.10	1.12 (Ladbrokes, Betfair)	1.05 (Boyle Sport)
Tennis – Murray beat Monaco	1.17	1.25 (Extrabet)	1.12 (Betdaq)
Tennis – Del Potri beat Troicki	1.17	1.22 (Betfair)	Stan James (1.14)

So as you can see, there is quite a difference in the odds. About 20 bookmakers are compared and not every bookmaker will be taking bets on every event.  Most will offer very similar odds but there can be a fairly big difference between the best and worst odds offered.

Take the first bet as an example.  17 bookmakers had a market for the Verdasco V Lapentti tennis match when I checked. 8 were offering the same odds as I got, 1.14, another four were only 0.01 either side of this.  So while there is a difference of 7% return between the best and worst odds, nearly 50% were offering the same, and the majority were within 1% of this.

So if you use just one big name bookmaker, it probably doesn’t matter too much which one as their odds are all very similar.  That said, if you can make the extra 1-2% here and there, your overall return over a year can be significantly increased.  While at current interest rates I’m sure you would jump at a chance to get an extra 1-2% return, it perhaps depends on whether you feel the extra time needed to check the odds is worth the extra gain.

Moving on, the most obvious trend is that one particular bookmaker (and I use the term loosely for reasons that shall become apparent in this instance) consistently offers the best odds for events, Betfair.  Over the next few posts I’ll explain a bit more about Betfair, how it works and some of its pro’s and cons.