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Sports Betting Explained
Author: Victoria Fell
Picture the scene, it is the year 2010, you are sat with your best friend and another nine good friends, in the Soccer City Stadium in Soweto, South Africa, awaiting kick off for the Football (soccer) World Cup Final. You turn to your best friend and say; “I bet Wayne Rooney scores the first goal”, and your friend replies that the Brazilian defence is very strong and being a natural pessimist she doesn’t think there will be any England goals. She will bet you £5 that he will not score the first goal. If you take this bet you have ‘wagered’ money on an ‘outcome’ in a sporting event and you are therefore partaking in sports betting.
There are different types of sports betting and sticking with the theme (it is one I am particularly fond of, being English) this article will explain simply and briefly what they are:
1. Fixed Odds Betting
2. Betting Exchanges
3. Spread Betting
4. In Running (In Play) Betting
Fixed Odds Betting
If your friend had agreed with you that indeed Wayne Rooney would score the first goal, then you may take it upon yourself to find somebody else to take your bet. Your best option would be to go to a bookmaker (these are available not just in person but most conveniently online or via telephone). A bookmaker would give you a much better return for your £5 than simply £5 if you win plus your original stake of £5 back (this in betting parlance is known as evens or 1/1), as it would be very rare to find something as unpredictable as the first goal scorer in a 90 minute game of football at such short odds.
A bookmaker would have a carefully devised list with all 22 players and the ‘odds’ (chance) of each of them to score the first goal. In this example say Mr. Bookmaker has Wayne Rooney listed as 5/1. For every pound that you place on Wayne Rooney to score the first goal you will get 5 back. Instead of betting your £5 with your friend where your profit would be £5, betting your £5 with Mr. Bookmaker will earn you a profit of £25 when Wayne Rooney does indeed score the first goal. Fixed odds do not mean that the odds cannot change in the run up to the beginning of the event, but that as soon as the event begins then the odds are fixed.
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Betting Exchanges are typically internet based. When you use a betting exchange you can act as a bookmaker or a client. There are two types of bet that you can make on a betting exchange, you can ‘Back’ a bet, which means that you are betting a particular ‘outcome’ WILL happen (essentially the same as fixed odds betting), so you are taking the role of the client. Or you can ‘Lay’ a bet, whereby you become Mr. Bookmaker and bet that a particular ‘outcome’ doesn’t happen.
To utilise my analogy further; say your pessimistic friend is so sure that England will not score that she decides to ‘Lay’ bets to yourself and others by offering odds on each England player. If an England player doesn’t score then she is in the money, yet she will also be in the money if any England player scores whom she hasn’t taken any bets on or if her total takings exceeds her payout. If for example she decides to offer you slightly better odds than the traditional bookmaker by giving you 6/1 (a typical feature of a betting exchange) and there are 10 others in your group who have all had a £5 bet but on other players. You are then the only person to bet on the winning outcome because, as we know Wayne Rooney does indeed score first, then out of the £50 she has taken she only needs to payout £35 (£30 in winnings plus your £5 stake). Miss Pessimistic has made a profit of £20.
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Spread Betting starts with a ‘prediction’ which is made by the firm hosting the spread betting. Again this activity is internet based. The prediction is a range (or a spread) of numbers which most often end in .5 so as to avoid a tie.
Another friend at Soccer City stadium that day is a bit of a statistical nut, and he reckons that the amount of corners in this game, owing to both defence’s prowess will be low, maybe about 10, therefore, Statman (as your statistics loving friend is known) decides to offer you and the rest of your friends the chance to bet that either the total number of corners in that game will be lower than 9.5 or higher than 10.5. Five friends go lower and are in technical terms ‘Selling’ the bet. Four friends and yourself go higher, this is known as ‘buying’ the bet.
The game ends and after watching winning (and only goal scorer) captain Wayne Rooney lift the Jules Rimet trophy, the excitement has died down and Statman’s girlfriend (who was given the job of counting the corners as she wasn’t really that interested in the game anyway) delivers the amount of corners and it is a monolithic 16. The five friends who went ‘lower’ look worried and they have every right to be, Statman subtracts 9.5 (the original figure the group of five bet that there would be LESS corners than) from 16 (the actual number of corners) this is 6.5 he then multiplies their original stake, a modest £2 by 6.5 and deduces that each of the losing five owe him £13. Statman then calculates the winnings of yourself and your four fellow wise friends. He subtracts 10.5 (the figure you and your friends bet there would be MORE corners than) from 16 and arrives at 5.5 he then multiplies your £2 stakes by 5.5 and works out that he owes you and your friends £11. Even though then, his prediction was wildly out, as
the spread betting host he still makes a profit of £10.
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In Running (In Play) Betting
‘In running’ or ‘in play’ betting is as simple as it sounds. You bet on ‘outcomes’ of a sporting event whilst it happens, this is great for events which are televised. These bets can take the form of any of the three aforementioned sports betting types.
You may think now that this article is contradicting itself, in that at the end of the fixed odds section the article stated that odds were fixed once the event had begun, that remains true, yet essentially the premise of fixed odds is easily transferred to ‘in running’ betting.
We return then to South Africa and 2010, say Wayne Rooney’s goal does not come until the 89th minute, until then Miss Pessimist becomes more and more confident in her prediction that Wayne Rooney will not score first that she begins to offer the rest of the group increasingly better odds, say for instance, 40 minutes in she goes up to 8/1 and 80 minutes in raises the odds to 10/1. This is ‘in running’ betting fixed odds style.
The betting exchanges are usually extremely busy ‘in running’. ‘Layers’ will do as Miss Pessimist has done and the odds offered will fluctuate wildly. ‘Backers’ will be opportunistic, especially if their original bets are down, and will try to recoup losses by scooping up generous odds for the seemingly highly unlikely. This has paid dividends in a small number of cases (usually when football teams from Manchester play against Tottenham Hotspur!). It should be noted that betting exchanges react enormously to any goal or to long periods of play when one team dominates. These can be carefully taken advantage of.
Spread betting also works well ‘in running’, with the ‘prediction’ made by the spread betting host being subject to change throughout the game. If only Statman had paid a little more attention to his long suffering girl friend perhaps he could have made more than £10 by adjusting his predictions once the ‘Sellers’ (those that had gone lower) bets were down thus giving them the opportunity to bet further and thus most probably increase his profits.
Better still though he’d have realised that there were in fact 10 corners and not 16. The moral of this story fits well with all sports betting; keep your eye on the game (and not those scantily clad Brazilian ladies doing the Samba in the opposite stand!) because not doing so halved his profit and it could seriously damage yours!
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