## The Gamble of Premier League Odds
Simon Trim, a business consultant for 10star Elevator, discusses the difficulties faced by betting firms as the new Premier League season starts, and how they identify crucial factors within a vast amount of data.
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The Gamble of Premier League Odds
As the saying goes, spring is for love, but summer is for football, and it’s a time when betting companies face the tough task of setting odds.
Trading teams must consider many factors, the most important of which is player transfers.
New additions can create excitement among supporters, just as losing key players can be a significant setback for a team. For instance, Tottenham’s chances of finishing in the top four of the Premier League next season have decreased by about 7% due to Harry Kane’s transfer to Bayern Munich.
While the spending power of Saudi Arabia and Major League Soccer, and the subsequent way they purchase high-priced players, is good news for some Premier League clubs, it also increases the probability of players leaving before the transfer window closes.
**Action**
As this article is being written, Mohamed Salah may be on his way to Al-Nassr;
Liverpool could potentially swap him for Mbappe on a temporary basis, and PSG might attempt to offset this by acquiring Kane before Bayern makes their move.
This would be a prime example of the kind of player exchanges that could occur right now, which would likely cause multiple price fluctuations in both the short-term and long-term markets – all of which would need to be taken into account by trading groups.
Beyond transfers, there will be a significant amount of uncertainty generated by early season performance. After their opening day defeat, Wrexham’s value dropped by about 10% after winning League Two, and it’s not unusual for “underdog” “pursuers” to transform into “losers” once the season kicks off in earnest.
However, a team’s most recent game only accounts for a small fraction of its overall “evaluation” in models that utilize index smoothing – perhaps less than 1%. But the impact of a loss on that team’s price in the marketplace is often much greater than that.
Utilizing Accurate Prices
The secret to wagering isn’t in establishing “accurate” prices. It’s in knowing what the true price is and then setting a price for your clients that is sufficiently far away from the true price to benefit the operator.
If your customer believes something has a 20% chance of occurring, and you believe it’s only 10%, then you’ll have a “gain” in your favor due to this.
The challenge for operators is determining what the “accurate price” actually is.
Confronting a multitude of uncertainties, how do you assess the worth of a group? For instance, if a group performed admirably at their home ground in the previous season, what is their worth in the upcoming season (hint: not substantial)?
How do you gauge a leader’s capabilities? If you encounter an incompetent official on game day, does the strength of the players hold significance? Is a defeat a random occurrence or a sign of future events?
Deciphering Indicators
In today’s business landscape, identifying indicators is a formidable task. Operators delegate the majority of their trading operations to supply chains, which lack experience in pricing without market benchmarks.
Consequently, most prices blindly follow market trends, believing that “maintaining consistency” means avoiding unfavorable deals. If you lack knowledge of the probability of a particular outcome, then it doesn’t matter if your business model is based on restricting access to clients who possess greater knowledge of wagering than your supply chain.
For operators, the only long-term prudent choice is to discover a method to break this pattern.
Price Enhancement
Operators can enhance their pricing strategies through two significant alterations. The initial approach is to utilize “rating” models based on a more comprehensive and extensive range of data.
Therefore, when the market experiences transfers or matches are played, robust models capable of considering more variables can be updated instantly, and comprehend the true reflection of the outcome.
Systems developed using this technique, or companies utilizing these systems, are in the best position to manage market fluctuations and maximize trading gains.
**Examining Data**
The second strategy involves operators utilizing the data embedded within their customer wagers.
The emergence of AI signifies that machine learning methods exist that can extract and respond to any “information” present in customer bets. Even a small volume of bets can enable users to refine pricing.
Combining this with the previously mentioned sensitive rating models, alongside expert trader supervision, will enable operators to begin generating industry-leading or “alpha” returns.
Therefore, returning to Harry Kane. Is he truly worth 7% for a season? The oddsmakers are still grappling with pricing that this week. At 10star, we are confident we possess the answer. We are simply relieved we are not Tottenham supporters.
Simon Trim has over 25 years of experience within the betting industry, including over 15 years on boards. He was a key driver behind the expansion of the B2B fixed odds market by introducing the intricacies of spread betting, and is currently a strategic advisor to 10star, a provider of sophisticated market making and risk management services.
A fresh enterprise, 10star, established by the same individuals behind Pinnacle, is leveraging their established know-how to assist sports betting operators in boosting their profits. They’re achieving this by incorporating innovative data and risk management methodologies borrowed from the financial sector.
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