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Being a bookmaker on Betfair using Bet Angel For many years punters have traditionally lost money to the other side of the book. Finding a bookmaker without a bulging satchel was a greater task than picking the winner in the Grand National. So if only bookmakers win, why not be one? The art of bookmaking has always been to create a balanced book. You need to take money from backers in proportion to the odds you have offered, obviously with some margin yourself. If you can’t do this your risk is out of proportion to your potential payout and you could face a large loss. For traditional bookmakers their role was pretty clearly defined, they needed to split opinion. If they split opinion they would nearly always have a balanced book and therefore make money. In modern betting markets splitting opinion is no longer an option. The market is free from your influence and people pick and choose their own prices. If you badly price your market then arbitrageurs will soon find out and they will hunt you down in the middle of the Atlantic Ocean at three o’clock in the morning to take advantage. Despite your lack of influence on the market, betting exchanges do offer you the chance to choose and lay a perfectly aligned book. It is this feature that has found other bookmakers often entering the exchange market to help balance their books. In a bit of an about face, a lot of book balancing is done on course now by hedging positions on exchanges. Bookmakers make money by laying odds on an event at a price above true odds. This forces the punters who are backing an event to pay more than 100% for an outcome that can only possibly end with a 100% chance. This is why trying to make money by attempting to beat the traditional bookmaker was incredibly difficult. In a five horse field any one of five horses will definitely win the race, there is a 100% chance of that happening. If, as a bookmaker, you can sell the book at 110% you know you only have to pay out a maximum of 100% and the remaining 10% will be your profit. If, as a punter, you are buying 100% for more than its worth, you will always lose. That is unless you know something significant enough to turn over the bookmakers built in margin. There is the theory what about the practice? Calculating and placing bets to create a book and then managing those bets can be a complicated business. But thanks to software like Bet Angel you can now create books on a betting exchange with simplicity and ease; in fact with just a couple of clicks of a mouse. In the following example I have selected an evening soccer match from the Portuguese league and made a book on that match. No punters lined up at my pitch and I didn’t have to take any telephone calls, it took just two clicks. I have no idea who Maritimo are or what there form is, but then I don’t need to as my anticipated position isn’t relying on this knowledge. All I am looking to do is ‘sell’ 100% probability for more than 100%. In this case you can see I have ‘sold’ my book to the other punters on the exchange for 101.2%. For a £500 stake we would net £6 for our efforts if all our bets get matched. Doesn’t sound a great return from a traditional punting perspective but obviously this isn’t traditional punting!
If you want to nominate a profit target then you can also do that in Bet Angel. In the next image you can see we have ‘asked’ for a £10 profit. Bet Angel tells us that we would need to stake £828 to get this profit! That doesn’t so that appealing so what can we do about this? There are some useful tricks on exchanges you can use to achieve the same profit without the same risk.
The first method is deceptively simple. One of the unique characteristics of the exchanges is the ability to recycle your money through the market. Say we placed our first position in the market we would net a £6 after all our bets were filled. As soon as our bets are filled we get the chance to re-use our money, the exchange makes the money immediately available to us again. This is quite a radical change from traditional betting markets where your money is tied until the betting event is over. So we simply repeat our bookmaking again. If we completed three books in this market before the start of the match we would have only used £500 but turned a profit of £18, a bit better than the £6 we thought we would get. If you still don’t like the idea of using such large stakes to generate such a small profit why not go for a variation on a theme? In the next example we have used the clever margin maker function on Bet Angel to create a book for us to generate margin subject to what happens in the match. In this example you can see that we have laid a book but ticked the margin maker function. This is telling is that if we want to make 5% margin on this match the draw would need to be priced at digital odds of 3.35. How do we know that the odds could reach 3.35? This will happen when the match goes in play and there is not a goal before around 30 minutes. Of course you will need to make a judgement on whether this will happen or not, so there is more risk with this strategy but your stake value is massively reduced.
Of course you can see you can do this with any sports event not just soccer. We have picked the John smiths Melling steeplechase at Aintree and applied the same selection criteria. Here you can see that if Well Chief, the odds on favourite, comes in to 1.80 in running we will net a £10 profit. We don’t need to worry about Well Chief winning the race we just want to see that he comes into contention at some point during the race. If he does we will make money not just if Well Chief wins but any horse in the race!
The ability to carry over bets in in-running markets is something never previously available before betting exchanges came into being. This ability gives us a very useful way of increasing the type and range of books you make and the possibility of getting your book completed in your favour. Bookmaking was something previously reserved for the privileged few and pitches were handed down through the generations or only changed hands for large amounts of money. To try and become a bookmaker was tough and even then it seemed a black art. Now, thanks to Bet Angel, you can set up your pitch and fill your satchel at your leisure!
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IMPORTANT FOOTNOTE : Please do not gamble with money you can not afford to lose and please read all risk notices carefully. Make sure you test any approach you have with small amounts of capital and thoroughly test your understanding of the market and any product you use in it |
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