What are the odds in Betting?

Movie Case Study

The scene shows Arjun Dixit (played by Emraan Hashmi) betting on cricket players and winning. Between a match between England and India, a rookie says England Team is the favorite and the odds are 8:10. Arjun Dixit bets Rs. 1,000 on Dada (Saurav Ganguly, Indian Cricket Captain).

In this blog, Learning Perspectives will explore the odds of betting and Gambling.

What are the Odds in Betting?

There are all sorts of betting that takes place in India. This can be witnessed in horse racing, sports or casinos, etc. There is one common denominator in different types of betting.  Probability is a common thing.

Probability or the odds of winning is decided in each game. Sports betting in India is quite popular. Cricket is one of the most famous sports in India and many people tend to bet on these cricket matches.

A match between good teams always swings once or twice and the rates fluctuate accordingly. Throughout the match, people bet on score predictions, wickets, or sixes in a match and bookies earn a lot of money.

Math of Betting

What is going on here? How are people earning money?

All gambling and betting events have absolute probabilities that depend on sample spaces or the total number of possible outcomes.

In matches, there is a certain ratio given to each team. For example: If there is a match between India and England (similar to the scene that we saw), if the venue of the match is a country’s home ground, then that country is considered a favorite. Of course, there are other factors such as climate, pitch, player’s form, etc. Bookies calculate a certain odd in the favor of a country.

In this scene, England is considered a favorite and he says the ratio is 8/10 (Aath Dus- in Hindi). This means Rs. 8 in India and Rs. 10 in England (favorites). 8/10 is also called local BHAAV in India.

The ratio here means, that when you bet 1,000 on Ganguly (an Indian player) assuming he will hit a sixer, then the amount that the bettor will receive is Rs. 1,000+ Rs. 800= Rs. 1,800.

If he is not able to hit a six, Arjun losses Rs. 1,000.

Odds are a little different when it comes to American and UK countries, odds can be in terms of decimals or fractions.

Betting on Horse Racing:

Horse racing betting in India is a legal sport. In 1996, it was ruled that horse racing is based on skill and not luck. This became extremely popular in India post that.

A horse has considered a favorite as the majority of people’s money is on that horse. There are many strategies involved while betting on horse races. Horses to come with odds. Let’s assume 2 horses have different odds such as 9/1 and 4/1. One can choose to divide their money and spread their wager to gain profit and cover investment as well. This is called the dutch technique.

Analyzing which horse is undervalued, selecting the horse that provides higher odds will get you better value for your bet. This strategy is similar to value investing.