What is the payout in sports betting?

The payout, pay-out or, depending on which podcast, "paiou", is an economic term that is applied in several fields, such as the stock market, the boards of directors of any company or... betting. It consists, in plain language, of a percentage that represents the part of the profits that goes to the payment of dividends. Applied to betting , the part of all the money wagered that goes to settle the winning bets, whatever the sign.

But that's the “positive” way of looking at the matter, because the usual way of looking at it is as the part of what you bet that the bookie, yes or yes, takes. However, this way of understanding the payout is incorrect, since we would be talking about overround. But, as we can see, from one the other is understood and in the end, they come to mean something quite similar: how much money bet the bookies really put at stake.

But, since certain technical aspects are best understood with numbers, here we go with an example:

Odds from a well-known bookie to UCL final winners, 1-X-2:

Forecast Share
Tottenham 4.20
Draw 3.60
Liverpool 1.95

However, with these figures, we do nothing. You have to convert them to percentages:

Tottenham - >23,809%

Tie -> 27,777%

Liverpool -> 51,282%

But... Stand by... 23,809+27,777+51,282... that gives more than 100!

Specifically, 102.868%. So, what is observed with these odds is that the house estimates the probabilities of each event, in this case, with a 2,868% margin that are taken “out of the sleeve". Almost 3% that corresponds exactly to what we would lose systematically if we bet by distributing our money to the 3 events proportionally to the expected profit.

With this in mind, we have to rethink the strategy when we bet... or really not? Usually, it has been said that the odds must be recalculated with the real payout to know exactly what percentage the bookmaker is giving you, so let's make the change:

Tottenham @4,2 -> 4,2*0,972 = 4,0824 -> 24,495%

Tie @3,6 -> 3,6*0,972 = 3,4992 -> 28,577%

Liverpool @1,95 -> 1,95*0,972 = 1,8954 -> 52,759%

We can observe that with payouts of 97% (0.972), as is the case, the percentages hardly undergo modifications . Therefore, is it really necessary to do all this crap to bet better?

It may not be necessary. If our estimate is going to be affected by an oscillation of 0.5-1% as a result of payouts higher than 95, possibly the fault is in our estimate.

Perhaps what should be done is to have the market controlled and do this periodically, to know which leagues and markets are paid with a higher payout and which with a lower one to know where you can earn money more easily and where the payout is so low that it becomes an epic to earn money from the bookies.

Or, directly, we can rely on the calculations made by websites like Oddsportal, where the payout is offered in its own column, grouped both by specific line and by bookie within each market.

So, after this entry, you know a new term, you know how to calculate it and it is your decision to complicate and calculate it for each bet, control it periodically or, directly, not take it into account in your estimates.

Published by:

Ines Ledo
Editor of the Innovate Change