Odds converter from predictions to bookie odds

I am new to the site and also the forum and this may have been discussed before. But does the site or anyone have a conversion model from probabilities to conventional bookie odds?
I am presuming it is just 1/the probability... ie a 50% probability equates to bookie odds of 2.00. Or a 30% probability is bookie odds of 1/.3 = 3.33.
Can anyone clarify if my math is indeed correct and any other comments welcome. Are others also checking for example other bookie sites to see if prices are about right?

You have to take into account that bookies juice their odds as well to get a cut, i.e. the TAB puts 50/50 odds at $1.87 a piece typically.

Thanks Shazzadude, I am well aware of that and the TAB are notoriously famous for offering a huge spread. But I was thinking more of the Betfair and other such sites where odds are often 1.99/2.01 etc so there is not spread. Cheers for the reply.

This is how I do it.

For my example I'll use the Ashes cricket test. Current odds are quoted by the TAB as follows:

England 1.62
Australia 2.60
Draw 11.00

Convert these prices into probabilities:

England = 1 / 1.62 = 0.6173
Australia = 1 / 2.6 = 0.3846
Draw = 1 / 11 = 0.0909

Add these probabilities together and you get 1.0928, so the TAB has a 9% profit margin on this. Now divide the probabilities by this number to get the actual probabilities (as assessed by the TA:

England = 0.6173 / 1.0928 = 0.5649
Australia = 0.3846 / 1.0928 = 0.3520
Draw = 0.0909 / 1.0928 = 0.0832

If ipredict were running a market on the Ashes (they won't of course), these would be fair prices. If any of these stocks were being offered at significantly less than these prices, I'd buy it. If any were being offered at significantly more, I'd short it.

The maths can be done quite easily using a spreadsheet.

Thank you Maxb... that makes a lot of sense and I have gone and made up spreadsheet. Just a note of caution.. the TAB sometimes have some weird prices that do not make much sense.
Are you on Betfair or the Purple place at all? There are some good opportunities to arbitrage.
As a newby, anyone know why Ipredict do not offer "probabilities" on sports events? Could vastly improve their liquidity and interest in the site.

Ipredict are not allowed to offer contracts on sports events or entertainment for that matter, and the TAB are not allowed to offer non-sport stuff, so there will never be any overlap there.

Overseas bookmakers such as William Hill and betting exchanges such as Betfair on the other hand quite often run contracts on elections etc, so you can get a comparison with ipredict prices using the method I described.

Can anyone tell me why the bookies have Aussie next prime minister at 1.13 for the coalition and 6.00 for Labour, but one here they are at .25 and .75.

That does not seem right? This is a huge arbitrage opportunity or have I missed something?

Good luck but setting up an account with an overseas bookmaker is a hassle, and after all the fees it might not even be worth it.

Cheers Maxb. I already have 2 accounts with overseas bookmakers, and also with Betfair which funnily the odds are 1.17 for the coalition to win and 7.00 for Labour to win. So I was really wondering what the huge discprepancy was. I have already taken about $500 worth of positions. The question I had was where is the caveat (maybe in the wording) or is the market really that inefficient? Because I can buy Coalition to win the election here at .76% or bookie odds of 1.31 and lay off on Betfair at 1.17. That is a huge hole. According to the odds the probabilities should be around .15 for a Labour win and .85 for a Coalition win.

The discrepancy would be because most of us don't have betfair/centrebet etc accounts.

Eric Crampton made several hundred dollars on the US presidency, taking advantage of the discrepancies between ipredict, Betfair and Intrade (RIP).

So go for it, you'll need about $150 to buy Coalition and short Labor to bring ipredict in line with Betfair's prices (approximately 0.8400 & 0.1600), then you can lay £17 against the Coalition for a return of £100 at Betfair.

Investment = $150 + £17 = approx $185, return = approx $200 on ipredict if Coalition win, £100 on Betfair if Labor win. Profit = $15 less fees.



Edited 2 time(s). Last edit at 08/13/2013 01:00AM by maxb.

Hi Maxb, have been doing that for a little while now... so have already taken advantage of it. Its short enough a time frame to make it worthwhile. My position is now about $45 AUD profit either way. But I really was amazed at the huge discrepancy that did exist between betfair and here. Because even if you dont have a Betfair or Centrebet account you can still see that prices are out of whack and buy/sell on here accordingly. I note that the prices are still slightly out of whack but I have maxed out my money on here so good luck to someone else who wants to have some free cash. Its pretty painless opening a Betfair account online.

that's all well and good, but who's to say the bookmakers' odds are correct? and you still have to sell/cover here to get the profit

Good point Milosevic, the bookmakers odds could be incorrect. But I see on Betfair that $2 million has been traded which to me seems pretty liquid and efficient. I would rather believe those odds than the odd hundred dollars or maybe thousands on here at a stretch. But like everything, do your own research before taking a position. Caveat emptor, or caveat vendit as can be applied on this site

It doesn't really matter whose odds are "correct" (whatever that means). The point is that by playing ipredict off against betfair it's possible to be 100% sure of a profit regardless of the result.

true that