Hatrack River Writers Workshop: How does betting work?

This is topic How does betting work? in forum Open Discussions About Writing at Hatrack River Writers Workshop.

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Posted by MartinV (Member # 5512) on :

I'm looking for a dummy's version (the dummy would be me ;-)) of a course about betting (gambling).

In a story I will have a Colloseum-like arena where spectators bet on who wins a fight. How do the odds work?

I imagine that if 40% of wagerers bet on one man and 60% bet on the other one, the winnings ratio would be 2:3. Did I guess it right or not?

Posted by Brendan (Member # 6044) on :

Not quite. Firstly, it is the amount of money, not the number of people that bet, that is important.

Secondly, there is a little bit for the "house" or bookmaker. So, if 40% of the money was going to A and 60% going to B, then the odds may be something like

A : 1:1(for every dollar you bet, you earn an extra dollar)
B : 1:3(for every three dollars you bet, you earn an extra one dollar)

At least that's the way it works in my part of the world

Edit to correct the direction of the ratio. (Silly mistake)

[This message has been edited by Brendan (edited October 26, 2010).]

Posted by redux (Member # 9277) on :

Since your story is about fighting, usually odds in a fight take into account past performance. More than likely the bookie would have fixed odds and people would bet accordingly.

In your case, I think boxing matches are probably the closest modern analog to a Coliseum fight. I know people even bet on details of the fight, how many rounds, if there will be a knock out, etc.

[This message has been edited by redux (edited October 26, 2010).]

Posted by MartinV (Member # 5512) on :

Naturally, the bookie takes probably half of the money (does he take less?). The point of betting/lottery is to make money, not give it away. That much I understand.

I thought about past performance affecting the betting and I can use that. Anything else you can tell me?

Posted by jayazman (Member # 2818) on :

The way the math works in odds if fairly simple. Using 3:1 in favor. That means 3 times out of 4, they win, 1 time out of four they loose. If you have 1:1 odds, then they win 1 out of 2 events (in this case they also lose 1 out of 2).
Usually, and this is not always the case, the money follows the odds, so in a 3:1, if you make the easy bet, for every $3 you put in, and you win, you get $4. Not really exciting. But if you bet against, for every $1 you put in, and you win (which means the person or team you are betting against loses) you get $4. Much more exciting. This happens rarely enough that most bookies make money on average. Different bookies with give different odds on the same event, so most people will try to find one that gives the best odds.
The more lopsided the odds get, the more fun it is, 9:1 gets you $10 for every $1 you put in, if the event goes your way. Now you're rich if you put enough money on it. Of course, you're also broke if you put too much money on it and it didn't go your way.
Remember, odds are always going to favor the house/bookie, otherwise they couldn't stay in business.

Posted by FreeThinkingRob (Member # 9300) on :

Sports betting "odds" work on a points system. If you place a bet and the "Points" are +200, that means you win $300 for every $100 bet. If the points are -200, you must bet $200 to win $100. This is the most common modern scheme, in it's basic form. You will sometimes see the points at +110 or -120, this usually happens when the outcome is pretty likely 50/50 odds and the betting is even on both outcomes, there is a 10% discrepancy that the "bookmaker" takes as a fee for running the gambling. The -120 bet is slightly better odds of winning, hence less payout. And these points will "flip flop" minute by minute until the fight starts. This is why people wait till the last second to bet. The earlier you bet the more likely the points will change, maybe in your favor, maybe not.

It gets way more complicated when you add in the additional "events" you can bet on, say fighter A wins in round 3 or fighter B wins by decision not knockout.

The "bookmaker" is also never a bettor in the outcome, they profit by providing a service, namely handling the transactions between tens or hundreds or thousands of different bettors. An example is a Las Vegas Sportsbook. They have no interest in the outcome of an event, their profit comes from providing the betting service.

Sports betting is completely different than casino gambling. It's a sure win for the bookmaker only in that if he adjusts the odds to match the total amount of money bet he can always take his rake and the more bettors the more they make.

Posted by DavidS (Member # 9303) on :

Some disclaimers first:
1. This information is from an Australian. There may be some regional differences, especially in how odds are quoted.
2. I am not an expert on this stuff.
3. I do not have a gambling problem. Really. I can stop any time I like...

Basically the idea from a bookmaker's perspective is to return less money than they've taken for a given event.

There's two ways bets can be paid out.

In pool betting all the money taken on an event - a horse race for instance - is put into one pool. The bookmaker takes a percentage of this - let's say 10% - and the rest is distributed to the people who backed the winner.

So, if there were 1000 $1 bets placed on a particular race, the bookmaker would distribute $900 amongst those who backed the winner. If there were 150 people they'd each get $6 for their $1 bet.

This is way our TABs work in Australia for horse racing.

The other way is fixed odds. This is more common for on course bookmakers, and would be more likely to be used in your Coliseum.

In this case the bookmaker assesses the event beforehand and assigns odds to each competitor. These would usually be listed in a format like 2-1: read "Two to one". In Australia this would mean if you place a $1 bet on this competitor and they won, you'd receive $3 back - ie $2 for each $1 you bet, plus your original stake. I have a feeling that the American system is different, but I can't say for sure.

Odds of 1-1 are usually listed as "Even" - that is, you'll double your money if that competitor wins. If there is an even greater chance that the competitor will win, then they become "odds on" - "1-2" or "2-1 on" means that you'll get back $1.50 for each $1 you bet.

For an event where there are only two competitors at least one would be odds on. If they were evenly matched it could be that they were both odds one - 4-5 for instance - to ensure the bookie doesn't lose.

If a bookmaker starts taking a lot of money on one competitor - either from one or two big bets, or from a lot of bets - he'll adjust the odds. So a competitor may "come in" from 4-1 to 3-1, for instance. Any bets written at the previous price still stand, but new bets will be at the revised price.

OK, that ended up a bit longer than I planned. I hope it helps.

Posted by MartinV (Member # 5512) on :

Getting some good info here.

Don't worry about where you're from. It's a fantasy setting so I can use all kinds of local details from pretty much everywhere.

Posted by pdblake (Member # 9218) on :

http://www.fortunepalace.co.uk/odds.html

http://www.online-betting.me.uk/articles/understanding-betting-odds.html

http://www.seriousbet.co.uk/learn_about_betting/pricing_odds

Just a few FAQs I found.