How do odds in sports betting work?

How do odds in sports betting work is the question that most of the bettors ask when they start sports betting.

So, Howodds work?

There are articles that will help you understand what odds are and how they work, such as “Can odds in bookmakers vary?” and “How many odd types exist?”

Bookmakers have a financial reason to get the odds right and expose them in the market with the help of a specific department or even more experienced bettors. In this case, the goal is to create a mirage that will most monetize the entity in a way that, regardless of the sport event result, there’s going to exist a considerable profit margin.

Bookmakers analyze several factors such as general statistics, previous match history, specialist opinions in the subject, evaluate disciplinary situations of a team structure and other factors that can contribute to the odds change in sports betting.

Check the following example:

The 2010 Football Worlds, in South Africa, was marked by the elimination of Italy and France in the group phase. France suffered a charismatic campaign in a social media point of view. It involved conflicts among the team and all the involved structure. Before France last game against South Africa, the French coach told social media what Nicolas Anelka punishment was, for his acts, suspending his services temporarily. The news didn’t go well to the player and the team. They revolted and ended up protesting against the coach so they refused to play in the last preparation training for the match with South Africa. It was a catastrophic movie for the French social media.

Giving the example, what were the odds provided by the bookmakers based on the situation?

In this case:
France 2.10 (around 46,6%)
Draw 3.40 (around 31%)
South Africa 3.60 (around 27,7%)

In the middle of an internal catastrophe in the French team, the bookmakers still offered around 47,6% of winning probability. Maybe it was fair having in mind the quality of the team (according to its history) and the winning need  (if France won, they would go to the next phase), but it was a very deceptive probability.

This means that the margin that the bookmakers provided was 106,3%. That means, the profit margin was 6,3% regardless the result the match result.

In the end, South Africa won. We could confirm that, in fact, the odds we’re very deceiving. Which means, there was an extreme need of Market Margin or “over-round”, that is, bookmakers margin.