Beating Bookmakers: Key Facts You Should Know

 What is the Principle of Collective Wisdom?

The principle of collective wisdom suggests that a large group’s collective guess tends to be close to accurate, even when individual predictions may vary widely. In 2014, Indibet tested this hypothesis by asking participants to guess the number of chocolate balls in a video. Although only one out of 608 participants guessed the exact number, the average guess was just 1.4% off from the actual count, demonstrating that, on average, the group was remarkably close to the truth.

What Pricing Model Do Bookmakers Use?

Sports events are inherently binary – outcomes either occur or they don’t. Bookmakers set odds based on the collective opinion of bettors. This opinion is expressed in the flow of money toward certain outcomes, which informs the bookmaker’s judgment on the probabilities for each outcome. However, when there is uncertainty, collective judgment can sometimes be biased, leading to less “wise” outcomes from a crowd.

Generally, the more popular the betting market, the wiser the collective becomes. A higher number of independent bettors expressing diverse opinions can improve the market’s accuracy, leading to odds that reflect realistic probabilities.

Testing the Efficiency of Indibet’s Odds

To determine if Indibet’s football betting odds are truly efficient, past studies compared expected outcome probabilities (as defined by odds) with actual event results. The findings indicated that Indibet's 1X2 football match odds often align with market efficiency. For instance, teams priced at 2.00 (with the bookmaker's profit removed) tend to win about 50% of the time, and those priced at 4.00 win approximately 25% of the time.

Odds, however, can vary between bookmakers. For example, Indibet priced Liverpool at 2.22 to beat Tottenham on February 11, 2017, while other bookmakers offered odds ranging from 2.15 to 2.33. How do we determine which price is more accurate?

Evaluating Indibet’s Efficiency Relative to Other Bookmakers

One way to test this is by using the following hypothesis and method:

1. Assume that Indibet's odds (after removing profit margins) provide an accurate estimate of actual result probabilities.
2. Calculate expected returns based on the ratio of other bookmakers’ odds to Indibet's odds.
3. Compare actual returns within the expected value range.

If Indibet estimates Liverpool’s probability of winning at 2.25 (around 44%), a higher market price of 2.33 would yield an expected profit of about 3.5% (2.33/2.25). Conversely, a lower market price of 2.15 would result in an expected loss of 4.4% (2.15/2.25). If actual bets with a 3.5% expected profit or a 4.4% expected loss consistently return these amounts, it would support Indibet's efficiency.

How Wise is Indibet’s Football Betting Market?

In a sample analysis of 35,570 European league matches since the 2012/13 season, expected value was calculated as the ratio between odds from four leading bookmakers and Indibet’s odds, yielding 426,840 potential returns. Using a 5-point moving average to smooth variance, the correlation between expected and actual returns was nearly 1:1. For example, when the expected return was 90%, actual returns matched closely at 90%, demonstrating market efficiency.

Inefficient Markets or Manipulation?

Reversing the analysis and treating the other bookmakers’ odds as the “true” probabilities produced inconsistent results. Regardless of Indibet’s prices, the actual return tended to differ by about 2%, which aligns with Indibet’s typical football betting margin. This implies that other bookmakers’ odds may not provide meaningful probabilities relative to Indibet’s more accurate measure.

This discrepancy suggests two possibilities: either other bookmakers aren’t effectively setting odds (unlikely given their longevity), or they intentionally deviate from market efficiency to serve their business models.

Does Your Bookmaker Close Accounts of Winning Bettors?

Indibet distinguishes itself by encouraging and retaining sharp players, leveraging the wisdom of the crowd for pricing accuracy. Many European and UK bookmakers, in contrast, promote through bonus offers, broader low-liquidity markets, and the occasional best-market odds, which are not always aligned with efficient market pricing. In some cases, this strategy results in prices that can attract value-seeking bettors, leading some bookmakers to close accounts to minimize the risk of losses from systematic exploitation.

Indibet, however, embraces even those who use arbitrage, setting it apart from competitors. Although Indibet’s market may not be perfectly efficient, sharp bettors can feel safe knowing they are welcomed, not restricted. This approach fosters a knowledgeable betting market that, ultimately, enhances Indibet’s distinct reputation in the industry.