How does the bookmaker's system operate?

💡A bookmaker’s algorithm explained
🔍Algorithm odds reviewed by a bookmaker’s oddsmakers.
🎉Different versions for different sports and betting markets.
✨The algorithm keeps upgrading
💬Can you beat the bookies algorithm?

At its most basic level, a bookmaker's algorithm is a calculation based on a set of rules informed by statistical data. The result aims to accurately predict the likelihood of potential outcomes for a sporting event. These predictions are recognisable as betting odds.

However, to state that massively undervalues just what an amazing piece of mathematics a bookmaker’s algorithm is, and its importance within the modern sports betting industry.

In this article, we will seek to explore the answer to how a bookie's algorithm works in more detail than simply saying ‘it’s a calculation based on a set of rules”’. Specifically, we’ll look at the different aspects that are taken into consideration for a typical sports betting algorithm in order to come up with accurate odds. We’ll also then explain how these odds are then reviewed and potentially refined before being offered live on site.

A bookmaker’s algorithm explained

A bookmaker’s algorithm defines a set of rules, data sets, calculations and adjustments that when processed, provide the bookmaker with odds on a particular market. There are some key things to note about a bookmaker’s algorithm and they include:

It is simply statistics & data driven.

While the algorithm can be thought of as a kind of calculation, that calculation is based upon evidence provided in the form of statistics and data about the recent and past history of the two competitors, the sport and market in question.

For example, if we are talking about the algorithm being used to work out the likelihood of a Full Time Result market in football, then the algorithm to work out the odds on the Home Win, Draw or Away Win will take into account not just the recent form of both teams, but also their historic record against each other, their performances at home, away, the number of draws they have had.

However, this data is just a starting point for the calculation. A number of other factors can influence a result such as the context of a match (is it a crucial league match, a knockout cup match, or a meaningless end-of-season game?) Are key players for either team missing? Who is the referee? What will the weather be like and how does that affect a team’s chances of success?

You can see immediately that the algorithm is far more complex than looking at basic form and history. That level of complexity has come from years of refinement, development and advances in computer processing power, which allows computers to access a far wider range of evidence, data, statistics and more to help enhance its rules for calculations.

After all these calculations and considerations, the algorithm will present the bookmaker with a set of odds for that market. Amazingly, this entire process takes just a fraction of a second to complete.

Algorithm odds are often reviewed by a bookmaker’s oddsmakers.

Once the algorithm has processed the data and created the odds, the oddsmaking team at the bookmaker in question reviews them. While the name may be a legacy from the past, when oddsmakers used to make the odds, their jobs now involve refining the odds churned out by the algorithm to ensure that they are accurate or need to be slightly altered.

This is particularly the case when betting sites want to offer boosted odds on selected markets to attract customers. Once these odds have been reviewed for outright and pre-match bets, then they will go live on the site.

Of course, this isn’t the case for In-Play betting, where the odds are generally created and altered by the algorithm while the game or contest is being played. In this situation, oddsmakers cannot review all odds, although they will monitor how the In-Play service is operating.

There isn’t one algorithm, but different versions for different sports and betting markets.

It stands to reason that a bookmaker's algorithm for calculating odds for football betting markets will not be useful for creating odds on golf, tennis, or cricket. As such, a bookmaker will tweak and adapt its algorithms for all the different sports it offers markets and prices for.

Each algorithm can calculate the odds for different sports markets in a fraction of a second. This leads us neatly onto one of the most impressive and exciting aspects of a bookies algorithm.

The algorithm also tracks bets made on markets, adjusts odds accordingly and uses the feedback to improve itself!

It is too simplistic to think of an algorithm as a single calculation. Modern-day algorithms will also track the money being bet on a market and then adjust the odds of the selections to ensure that the bookmakers' risk is not too great.

Advances in modern technology, especially in terms of new artificial intelligence, allow this software to track the changes in markets and adjust the odds in real-time accordingly. This is how bookmakers can now offer features such as In Play betting, where odds adjustments can be made as a game or contest is played out.

It will also store this data for future reference when refining future odds on single markets. This is a good example of machine learning, a process by which the algorithm can refine itself based on its past performance.

Can you beat the bookies algorithm?

If by that you mean can you find value odds in certain sports betting markets, then yes you can. The beautiful thing about sports is that no matter how good the algorithm is that a betting site uses, sport can always see the biggest favourites upset. The very nature of sport is that it can and will produce unexpected results or events, which even the best algorithm cannot accurately predict.

However, the algorithm does work to minimise a bookmaker's risk on a market. It also tries to offer the most appealing odds to appeal to punters. This delicate balancing act, which the algorithm can perform in a fraction of a second, benefits both the bookie and its customers.

Similarly, for sports where little information is available, or markets where the information available isn’t extensive or as much detail known about the game, you may well find that the odds offered in these markets can offer some better value betting options.

A bookmaker's algorithm is the foundation stone of modern betting, and the good news for everyone in the industry is that it is getting better and better as it evolves alongside modern technologies.