Betting odds, payouts, and house winnings

Question

I&#x27;m a programmer with no experience in sports betting but I&#x27;ve been tasked with creating a pseudo-bookie program. I&#x27;m trying to understand exactly how odds, payouts, and profits work, both for the bettors and for the house.I hope I&#x27;m on the right track, but I&#x27;ve noticed some things that don&#x27;t seem right.Let&#x27;s say I had an event with a total pot of $100,000. $30,000 on the losing team, and $70,000 on the winning team. Let&#x27;s assume that the last bet placed on the winning team was for $50,000 and it was the final bet placed. Before that final bet was placed, the winners pot was only $20,000 to the losers $30,000 which would result in 2:3 odds.At 2:3 odds, and $50,000 wagered, the payout would be $83,333. That means that the house lost at least $3,333 before it even paid the other winning bettors. I&#x27;ve ran some less extreme numbers but I want to see if this is correct before proceeding. I was under the impression that no matter what, the house could not lose money, but I&#x27;m not seeing a mathematical way of achieving that right out of the gate.Any help is greatly appreciated because I know you guys know much, much more about all of this than I do.

mardanlin · Answer

I&#x27;m a programmer with no experience in sports betting but I&#x27;ve been tasked with creating a pseudo-bookie program. I&#x27;m trying to understand exactly how odds, payouts, and profits work, both for the bettors and for the house.I hope I&#x27;m on the right track, but I&#x27;ve noticed some things that don&#x27;t seem right.Let&#x27;s say I had an event with a total pot of $100,000. $30,000 on the losing team, and $70,000 on the winning team. Let&#x27;s assume that the last bet placed on the winning team was for $50,000 and it was the final bet placed. Before that final bet was placed, the winners pot was only $20,000 to the losers $30,000 which would result in 2:3 odds.At 2:3 odds, and $50,000 wagered, the payout would be $83,333. That means that the house lost at least $3,333 before it even paid the other winning bettors. I&#x27;ve ran some less extreme numbers but I want to see if this is correct before proceeding. I was under the impression that no matter what, the house could not lose money, but I&#x27;m not seeing a mathematical way of achieving that right out of the gate.Any help is greatly appreciated because I know you guys know much, much more about all of this than I do.

TheGoldenGoose · Answer

You are on the right track with the basic mathematics. The problem is that no House Manager would accept a last wager tilting his stance from an already over-exposed 2-3 to a potentially Hose-Breaking 2-8 position. This is why Houses work together sharing information on line movements so as not to be caught in that position, otherwise known as "Not being able to Lay it Off".

A good site to check out would be... https://wizardofodds.com/

You can learn a ton of odds info on any gambling game but if you're not interested in other games skip over to the Sports Gambling Section and there's still a wealth of information.

Looks like you've bitten off more than you can chew. So, how do you eat an elephant? One bite at a time of course.

GL

mardanlin · Answer

I always like learning new things, so the one bite at a time approach is just fine with me! :) Thanks for the helpful link. Considering this is a pseudo-program and I won&#x27;t have other houses or bookmakers to share information with, I assume the only logical answer would be to implement a calculator that will act as the bookie would in turning down any bets that have the potential to break the house. Do you think that would be the best course of action for a stand-alone bookie, if not, what would you suggest?It doesn&#x27;t seem like that many people would place a huge bet when the odds are at such disfavor, so how realistic is this concern in the first place? I&#x27;m testing extreme scenarios to be safe, but I could be overly paranoid.Thanks again, hope to hear back from you.

mardanlin · Answer

I&#x27;ve also read about Tote betting, Fixed-Odds, and Starting Price betting. Are there any big book makers that do business as Start Price bookies? I understand the blind risk aspect, but it could be either beneficial or harmful depending on the circumstance.Sorry, would have edited my previous post but didn&#x27;t see the option.

TheGoldenGoose · Answer

Tote Betting - Horse RacingFixed Odds - RouletteStarting Price - Sports GamblingSee, easy as 1-2-3Now, who IS THAT man behind the magic curtain that sets the Starting Odds???

mardanlin · Answer

It&#x27;s starting to make sense now. Thanks. :)

Betting odds, payouts, and house winnings

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