There seems to be a general consensus in the gambling community that a good odds compiler generates a number to balance action on both sides of a game. Apparently, with a perfectly set line, the oddsmaker generates a point spread and exactly half the money will go for one side and exactly half the money will go to the other side. The bookmaker then has a game with absolutely no risk and duly performs his function as a broker, taking money from the losers, paying money to the winners and taking his commission of 5% or so.

This is a view with which I disagree. Let’s say you were booking a coin toss, where you know the true odds of the various possible outcomes. Let’s also assume you know the public has a tendency to bet on heads. This example is not unrealistic at all because in real life the market behaves irrationally and has a tendency to unreasonably favour one side over the other. The question is, how do you frame the market for this event? Do you set odds of $1.90 heads and $1.90 tails because you know the true probability of either event is 50%? Or do you set odds of $1.8 heads and $2 tails because you know the market is going to favour heads?

Without any equivocation I would say set odds of $1.90 a side, take on all the “heads” bettors and end up with more profit in the long run. The only two reasons I would deviate from this approach would be if:

(a) My bankroll was insufficient to handle unbalanced action

(b) I was not confident enough in the accuracy of my forecast

Situation (a) can arise in several circumstances. Some bookmakers are simply undercapitalised and are run by owners seeking to make some quick money. These types of books are generally found offshore which is why you should always do your research before sending your hard earned cash overseas. It can also arise in special events such as the Super Bowl. Most power ratings that I observed had Tampa Bay level with Oakland for the 2002 Super Bowl. However, bookmakers still made Oakland the favourite because this is the side that was favoured by the public. If any bookmaker had decided to book Tampa and Oakland at $1.90 a side, then every ticket written would have been for Oakland. Consequently said bookmaker would have retired richer than Bill Gates but on the other hand an Oakland victory would have buried even the biggest bookmaking behemoths.

Situation (b) can also arise quite often. You’re booking an ATP tennis event between two guys whose names you cannot properly pronounce. Or you’re booking a 3rd division soccer match taking place on the other side of the world. Or maybe you’re setting lines for US sports when your specialty is AFL because the manager doesn’t have anyone else who can even name one player in tonight’s NBA match. In this case there is a tendency to just copy the market consensus line because, more often that not the number is reasonably good and will produce a profit in the long run.

So, although a lot of people might disagree with me I believe that the idea of balanced action is a myth propagated by undercapitalised books and books that cannot accurately generate point spreads and money lines. A competent linesmaker at a well capitalised book should set the line and be confident that the number will be able to generate maximum profits in the long run.

How does this benefit the punter? Well one of the only reasons that sports betting can be beaten is due to the presence of inaccurate lines. If posted numbers were a perfect representation of the probabilities of the various outcomes, it would be impossible to generate a long term profit. If I was betting into a number generated by a team of statisticians and sporting experts, dedicated solely to forecasting accurate probabilities, I would be very wary of trying to take them on. The reality, especially in the more obscure sports, is that you’re likely betting into a number that’s been hastily compiled, copied from another bookmaker, then bashed the wrong way by a public that consistently manages to be on the wrong side of a positive expectation bet. This is a situation that makes me a lot more comfortable. Until next time good punting!