Contrary to what many bettors think, bookmakers rarely open a market at the perfect prices for all outcomes possible. Therefore, opportunities do exist for sharp punters to make long-term profit.
In this article, we will explain why closing odds are usually more accurate than opening odds.
Bookmakers open the odds for an event by using diverse models that take into account statistics, injuries, historical performances but also the amount of money likely to be placed. They always make sure to have an in-built margin on each odds.
The bookmaker strives to accept bets on the outcome in the right proportions so that he makes a profit regardless of which outcome prevails.
However, if you have a deep look on your favorite sport and all matches already played this year, you will quickly notice that opening odds are very rarely a perfect representation of real chances.
Indeed, sport is not a science. This is also the reason why you will find plenty of bookmakers applying 10% or more margin on their odds, in order to protect themselves from sharp punters.
A basic example is when you see a NBA game with odds of 1.90/1.90 on the Over/Under market.
So why closing odds are usually more accurate than opening odds?
In financial economics, the efficient-market hypothesis states that asset prices fully reflect all available information.
If we apply this theory to sports betting, it means the sharpest bettors always place bets as soon as they see a value, according to relevant information they have, such as injuries of key players, overall motivation of the team, general attitude during practice… and because they are the sharpest bettors, they often use diverse tools to make sure to detect these values as quickly as possible, usually soon after bookmakers open their odds. And the more money they bet, the more the odds will move to a more accurate price.
Obviously, the closer we get to the start of a match, the more money has been bet on it, and the more likely it is that the all of the inefficiencies have been eliminated. Thus the odds at the time the match starts, the closing line (margin removed) will reflect all of the information that is in the market.
This is why the volume of bets is crucial to bookmakers. More money means they are more likely to get the balance right. It is actually quite rare to get markets perfectly balanced, the purpose is to get as close as possible.
Betfair attracts professional sports traders, with large bankrolls, who give their best to exploit any inefficiencies that they could find. You will find the Back and Lay functions very useful if you are able to find early values in order to trade your positions before the start of the event.
Don’t hesitate to drop a comment below or contact us directly if you have any questions.