How Bookie's work
Have you ever wondered what shapes the bookmakers odds? The traditional wisdom would have you believe that the odds are based on where the money is. Obviously if the majority of the money is on one particular outcome then the bookie will not want to be offering long odds on that outcome. Is this true? Paddy Power recently published some information on where the bettors are putting their money on the Premier League outright market this year (see right). Based on these stakes, you would think that Paddy Power would ideally want to offer Man Utd at 2/1, Liverpool, Arsenal and Chelsea at about 4/1 and Man City at about 9/1. These payouts would guarantee a profit for the bookmaker no matter who wins. However the reality is far removed from that. Take Liverpool for example. Paddypower opened the market in June offering 13/2 on the Anfield Reds. Liverpool clearly received strong backing from the punters. The ...