One of those random questions that pops into my head from time to time:
People bet on all kinds of things. There are state-run horse-racing betting… places. There are informal football betting pools. I understand there are bookies out there that will figure the odds and let you bet on just about anything. But here’s what I don’t get: the impression I get is that in, say, a horse race, you can choose to bet on any horse from the long shot to the sure thing. The payout is higher if you bet on the long shot and win, but there’s still a small payout if you bet on the favorite. Now, how does that work, economically? Doesn’t offering a payout for the most likely outcome almost gaurantee a loss for the bookie? Even if it’s low, the majority of people are still going to bet on the most likely winner, right? To take a simple case, if there’s a 10-to-1 chance that Socky will beat Meathead in a boxing match, where’s the financial advantage in offering odds on Socky? Just as a Meathead victory should result in a payout of ten times any amount that was bet on him, shouldn’t a Socky victory logically result in a payout of one tenth of what was bet – a bet that no one in their right mind would make? What am I missing here?
because there are alot more horses than prize winners. All the people that didn’t win jack squat have their money thrown into the pile. Enough people think exactly that- why bet on Socky when I could really win big if the under dog takes it.
ditto what she said.
plus, the bookie will win big on “for sure” bets that go awry.
if I put down $500 on the favored horse to win $50 and wind up losing, the bookie makes out pretty well.
The bookie, and any betting establishment, make their money off of addicted gamblers like my father. He would place multiple bets on horses in a race, hoping one would pay off. He would get convinced that a winning ticket was among a roll of scratch offs, and buy the whole roll and scratch away for hours. In all the years of my youth, when he was making about $500 a week, we saw very little of that money. And he ‘won big’ only a few times, and it was far less than he had spent.
enough people are always willing to bet on the odds-against outcomes. and that itself often gets figured into the payoff ratio. in other words the odds are 10 to 1 not strictly because of the likelihood of socky winning, but also bc they perceive that 10 to 1 will bring in enough bets on meathead to cover the socky payoffs, while still being safe to cover if meathead does win.
Thank you 🙂 I half expected you’d be the one to answer it in a way that made sense.
You’re very welcome – I have some degree of expertise in the field of casinos and betting. Everyone gave great answers, especially Tiger, but I think they were trying to explain why the better makes the unwise bets (which certainly provides the payoff money), as opposed to explaining how betting odds work.
Here is a topic that I am completely unqualified to even have an opinion about.
I don’t even buy scratch-off lottery tickets much less bet on horses.
Not out of some superior moral attitude mind you…just no interest.
Might be an interesting topic of study though. I could use a second source of income.
How exactly do you work ‘bookie’ into a resume?