As the launch date of the Scorum Betting Exchange approaches, I'm getting more and more questions from people interested in the sports betting that have never done it before. In this series I will try to explain some basic concepts and the terminology used by the sports bettors.

Since I'm going to oversimplify and abuse the terminology in this post, I apologize to the pros among you. In my examples I will be using the so-called European odds.

Odds And The Implied Probability

The odds offered by the bookies tell you three things:

  1. How much you'll win if you make the right call
  2. What the bookies think that the probability of an event occurring is
  3. What is the bookies cut
source: betexplorer.com

Let's start with a match that's being played today in the UEFA Europa League:

PAOK v Chelsea

On the left side you can see the odds offered by different bookies for the 1x2 market. We'll use the bet365 odds as an illustration:

The odds on PAOK to win @5.25, a draw is @3.90, and Chelsea to win @1.72.

If you stake $100 on Chelsea to win (and they do) you will get $172 back (1.72 x $100). Your profit is $72.

Now, how do we get the implied probability from the odds?

When using the decimal (European) odds, the calculation is really simple:

The Implied Probability = 1 / Odds

Using this formula for our game we get:

  1. PAOK has 1/5.25 = 19.05% chance to win this match
  2. Draw has 1/3.90 = 25.64% chance of occurring
  3. Chelsea has 1/1.72 = 58.14% chance of winning

So far, so good. Now let me confuse you a bit.

If you're familiar with the probability theory you have to know that the sum of the odds above has to be 100%, let's see what we get:

19.05% + 25.64% + 58.14% = 102.83%

What is that 2.83% extra?

That extra is called an overround and from that number we can calculate what is the bookies profit (in %) on the total amount of the bets staked. The bookies' profit is also called the vig, juice, take, or the cut.

In order to calculate how much the bookie is planning to take in the profits based on the offered odds we can use this formula:

The Vig = overround / (1 + overround)

Let's do a quick calculation:

The Vig = 0.0283 / 1.0283 = 0.275 or 2.75%

As the betting industry goes this is a small vig, but it is still the percent of the money you will lose to this bookie if you bet long enough.

Yes, this is your guaranteed loss and the bookies guaranteed profit over the long run.

So, if the system is rigged and your loss is guaranteed... why should you bet at all? Also, are you trying to say that nobody is taking the bookies to the cleaners? Are the bookies the only winners in this game?

Well, yes and no... it's complicated :-)

Yes, the vast majority of the sports bettors are losing money, but some of them are making it. Some are even consistently beating the bookies in this rigged game. So how they do it? It's simple, really:

They place the +EV bets if not all, then most of the time.

And there you have it, the secret to the betting success - place +EV bets :-)

On a serious note, though, I've told you above everything and nothing. But, worry not! I'll be back with a post explaining what that mysterious +EV thing is and what's more, how to find it yourself.

That's enough for today. Thank you for reading and good luck!

Join the Sports Betting Community on Discord and do vote stimp1024 and btb as your scorum delegates. Thank you!