Trump is the strong favourite at the bookies, but US national polls suggest the contest is more 50-50. Why the difference? Which is right?

This is a great opportunity to understand how sportsbooks and betting markets work.

BETTING ODDS DO NOT PREDICT OUTCOMES,

THEY TRY TO EXTRACT THE MAXIMUM PROFIT FROM BETTORS.

 This concept is key to understanding betting markets and how to find value trends in them. When sportsbooks have a 50-50 event, they do not offer odds of 2.00 on both outcomes. They take out a margin and offer worse odds on both events. For example, if we have a coin-toss, the sportsbook would offer 1.90 and 1.90 on either outcome heads or tails.

You can clearly see there that the bookie will win whatever happens because they are offering unfair odds that are lower than the implied probability that the outcome will happen. But if for some strange reason, 95% of people start backing heads coming up in that coin toss, the sportsbook builds up a big liability on the heads side, and if that comes up, they could be ruined.

So even though there is no logical reason why heads is more likely to come up on the next coin toss, they will reduce the odds they offer to make that bet less appealing. They also then increase the odds on the tails outcomes to encourage bets on that side to try and balance things out. So the odds might become 1.47 for heads to win and 2.8 for tails to win. We know in our heads and in our gut that there is NO WAY that heads is more likely to come up, but the odds make it look like that. We cannot then say that some magic is going to happen with gravity, or the coin is unfair and somebody knows that the tails side is slightly heavier and more likely to go face down, it is simply business. The bookies are balancing their books. They have enough action on heads, so they want to balance things out with more action on tails.

If we research online a bit more about the US presidential election betting, then we find numerous media reports that suggest 95% of bets last week were placed on Trump winning. (Source) And there we have it. Despite polls suggesting that this is a close run 50-50 race, the odds make it look like one outcome is more likely to happen. This is a great example of how betting markets DO NOT predict outcomes. They are just prices that aim to make profit for the sportsbook by balancing bets out if too many bets come in on one side.

How can we use this knowledge to our advantage in betting?

We should realise that we are betting against the public market, and not betting against accurate event prediction models. We can use market models as a starting point and then see how those opening prices get influenced by the public and if there are profitable trends to be found there, often by going against the public sentiment. With proper backtesting, we can find certain patterns of form and odds that the public often gets wrong, and we take advantage of that.

In the Betamin Builder, we can backtest betting ideas based on objective filters (form) and subjective filters (odds). We can also backtest based on the opening prices form Pinnacle that are based on their market models BEFORE the general public gets to influence them, and the profit/loss is calculated based on the losing odds, which are AFTER the public gets to influence them with their emotional bets. In this way, when we see certain betting strategies that go “against the trend”, such as betting on the home win after the home team has lost a lot of home games recently, we are not saying that there is an increased chance of this outcome happening because it did not happen before (that is the Gambler’s Fallacy), but instead we are saying that the public market stays away from that team with poor form, and probably back the other outcomes of draw or away win, and this leads to the sportsbook increasing the odds of the unpopular home underdog above the actual fair odds of the outcome. By continually betting on such trends long term, and with proper bank management, we can hope to take advantage of this and get through natural variance to end up with profit at the end of a 1,000 bet plan. This is what big data abetting is, and this is what the Betaminic database enables you to research.

Against the Trend Strategies in the Betamin Builder

There are a number of strategies that go against recent form. Some of them have “Against the Trend” in their name, or you can look at the filters of strategies on the public strategies page, or you can research things for yourself in your “My Strategies” area. Here are two of the best performing against the trend strategies on Betaminic.

Colossus 05 Against the Trend Overs AL (Updated 2020-07-04)

https://www.betaminic.com/system/strategy/details/263780

This strategy backs the over 2.5 goals results after a run of under 2.5 goals results for both teams. It is a bet that the general public would not be keen on, unless they are feeling that the teams are “due” an over 2.5 goals results. Most bettors follow recent form thinking it is likely to continue and they overbet on the under 2.5 goals result. This leads to the over 2,5 goals selection price rising into positive expected value area.

Contend UD

https://www.betaminic.com/system/strategy/details/205916

This strategy backs the home team win after a long run of failing to win. Again, with the home team failing to win for such a long streak, the general betting public shies away from this team, instead backing the away team or the draw in the next fixtures, this leads to the home win selection price rising and value being available. It looks like a very unpopular and “bad” bet to people looking at recent form, but the long-term data suggest this is the kind of match that the public gets wrong and the betting market ends up moving the odds far away from their fair value to balance the books.

Bank Management and Staking Plans

One note of caution is that Against the Trend strategies tend to have higher average odds and lower win rates than strategies that follow the trend or back favourites. This can lead to higher drawdowns and higher volatility. To guard against this, you should manage your bank carefully. Using the right staking plan is very important to making a betting plan to go the distance. We strongly recommend you read our article about the best staking plans are.

Get started now with Betaminic and use data to your advantage. Don’t bet emotionally by looking at market odds. Don’t follow the crowd. Instead, do your own research and bet smarter with Betaminic.

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