When you delve into the world of sports betting, one term you’ll often encounter is “theoretical hold.” Understanding this concept is crucial for both novice and seasoned bettors alike, as it directly impacts your betting strategies and potential returns.
What is Hold?
The hold refers to the percentage of money that a sportsbook expects to retain from the total amount wagered by bettors over a specific period. This figure is not a guaranteed profit but rather an estimate based on the odds set by the bookmaker. In simpler terms, it represents the bookmaker’s edge over the bettors. If a sportsbook took equal money on both sides of a bet, then the hold would be their profit.
How is Hold Calculated?
Hold is calculated using the odds provided by the sportsbook. Let’s break down a simple example to illustrate this:
Imagine a sportsbook offers a game with the following odds:
- Team A: +150
- Team B: -200
To find the theoretical hold, we first convert these odds to their implied probabilities. The formula for converting American odds to implied probability is:
Next, we sum these implied probabilities:
40%+66.67%=106.67%
Then, we subtract off 100% from the value and divide by the original value:
(106.67%-100%)/106.67% = 6.26%
This 6.26% is the bookmaker’s hold on this game. It means that, on average, the sportsbook expects to retain 6.26% of the total amount wagered on this game as profit.
How does Theoretical Hold Differ?
Theoretical hold is calculated the exact same way that the hold is, however, there is a difference. With theoretical hold, we take into account every sportsbook that the bettor has at his fingertips.
Different sportsbooks often offer varying odds on the same event, leading to different theoretical holds. Shopping around for the best odds can reduce the bookmaker’s edge and increase your potential returns. This also allows the user to find arbitrage opportunities which guarantee a profit when the bettor bets both sides.
Concluding
In conclusion, theoretical hold is a fundamental concept in sports betting that every bettor should understand. By grasping how it works and incorporating this knowledge into your betting strategy, you can make more informed decisions and improve your chances of success in the long run.
To do a calculation on your own: try our hold calculator.
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