Quote (Thor123422 @ 7 Sep 2020 22:03)
Odds makers don't actually do odds based on the likelyhood of winning.
Odds are adjusted based on how much has been bet in each direction, in such a way that no matter who wins the house makes money.
That's an extremely simplistic understanding of modern bookmaking.
Sure, adjusting the odds to balance the book is part of it, but bookmakers also have complex models running in the background to estimate the true likelihoods and adjust their odds in real time. If there's significant movement in the race, bookmakers have to adjust swiftly, they cant wait for hours until new bets have come in before they adjust. If they allowed for such a long delay, savvy bettors have already put up big sums at too favorable odds. This is particularly true for high volume races like the presidential one where there is a high amount of bets being placed round-the-clock, so that sudden movement from the pros might be drowned out by the background noise and not easily identifiable with automated algorithms.
More generally speaking, relying only on the bets made by the populace/conventional wisdom to determine the bookmaker's odds would expose him to being gamed by professional players which are using models that beat the general public. A bookmaker needs to have an idea where the race truly stands at a particular moment in time, and then balance his book accordingly from this "correct" starting point - otherwise, pro gamblers could too easily identify the so-called value bets and steal parts of his profit margin. Very roughly speaking: the efficiency gap between the true odds estimated by pro gamblers and the true odds estimated by the bookmaker must be kept below the overround. If a bookie cant achieve that, than the pro will be able to rake in guaranteed profit over the long haul.
As an example, look no further than the 2016 presidential race, where Vegas gave Trump about a 25% chance of winning, similar to the 27% fivethirtyeight and his own data guys gave him. Public sentiment was definitely more lopsided than that.
This post was edited by Black XistenZ on Sep 7 2020 02:56pm