The sports betting industry has become highly professionalized in recent years. The original betting sport was much more related to intuition, luck, and chance, but with the advent of modern mass media and the rise of the internet as a medium, online betting has become established. Initially, the betting odds at almost all betting providers were fixed, but with the introduction of dynamic betting odds and the opening of betting exchanges, the betting market is living up to its name. Take these advice for your round at the HellSpin.
Of course, the betting industry does not want to diminish the fun of betting, but it takes a bit of work to generate regular profits. In contrast, sports betting can be lucrative investments with the right techniques and methods that can indeed be profitable in the long term. However, one needs to internalize the know-how from the fields of economics, statistics, and market development. In this article, we attempt to explain how movements in the betting market can be interpreted and what they have to do with luck, chance, and success. Only those who understand the market know how to behave optimally within it.
Today, we will discuss odds movements in the betting market. Where do they actually come from, and how can one benefit from them?
The Betting Market – A Construct
To understand the betting market as a construct, a small definition must be made. In economics, a market is defined as a fictional place where suppliers and demanders come together and determine a (fair) market price for a good based on the distribution of resources.
In reality, this occurs, for example, in the stock market (in the form of stock prices), in the labor market (in the form of wages), in the goods market (in the form of product prices), and in the real estate market (in the form of rents). Many different factors influence the agreed outputs. The same applies to the betting market. The providers of sports bets (bookmakers) offer events at specific betting odds. The many market actors (all customers at the betting providers) will shape the odds based on their betting behavior.
The betting odds for an event are modeled using various variables (historical results, statistical peculiarities, league positions, and many other items), but because of customer behavior, they are dynamic. For example, if a win bet is placed disproportionately to its own odds, betting providers will lower the odds so that their profit margin does not come under threat. Regular odds movements in the betting market are the result.
Successful Sports Betting Is Not Coincidental
A customer can be viewed as a business that invests its capital (betting credit) and, of course, seeks to grow it. This should fundamentally be the goal of any enterprise; otherwise, sports betting could become an expensive hobby. Wagers are placed based on reasonable and well-considered decisions. There will be good phases and bad phases, and statisticians would now mention the term variance. The primary goal is, of course, the sustainability of one’s capital and ensuring that betting is worthwhile in the long run. Just as companies have a specific strategy for corporate growth, a sports betting expert should also have their betting strategy. If this is based on important market principles, then the chances of a potential source of decent additional income are quite good.
Why and How Do Odds Movements Occur?
However, it is essential to understand why the betting market moves. In the neoclassical market model, ideal markets are described. There, all market actors are subjected to competition. Ideally, market actors have complete information about supply, demand, and price structures. This is, of course, not the case in the fictional betting market. Therefore, a knowledge advantage over bookmakers, but also over other customers, can be leveraged. This knowledge advantage is worth real money! Important insider information in football might include knowledge of injuries and suspensions of key players, head-to-head statistics between teams, and internal club processes to which other customers do not have access.
Not every customer acts rationally. There is often betting based on names or historical performance, causing the odds on favorites like Bayern, Juventus, Barcelona, and others to be generally overrated and, only in rare cases (in the long run!), to yield profits. Thus, it is not uncommon for odds that are clearly underestimated to increase through market movement until market equilibrium is established.
As long as the market moves in one direction, equilibrium is not established, and the value might still lie in the higher-rated events.