Opening and Closing Odds: What Does It Mean?

As most people know, the odds a bookmaker offers on an event is based on how they see the likelihood of the different outcomes happening. All it takes is a little bit of calculations and removing the margin for the bookmaker.

The first thing that happens is the bookmaker offers its opening odds, which usually happens quite some time before the event starts. Afterwards, they adjust the odds based on the bets until they end up with the closing odds by the start of the event.

Opening and Closing Odds

The opening odds are the first prices betting sites offer, hence the name. In theory, these are based on a numerical assessment of the qualities of each team and how good they are compared to each other.

The opening odds are the starting point for the bettors, when they are placing their bets, and for the bookmaker to manage their risk. The closing odds on the other hand is the final odds offered by the bookmaker before the match starts. This is the culmination of all betting activity and information leading up to the match. Here, the activity on the market, the betting patterns and potentially the bookmakers’ wish to minimize or change its risk plays in.

What both the opening and closing odds have in common is that they both include the bookmaker’s margin. So, we must take this into consideration to paint the correct picture.

For this example, I’ll use the 1X2 market on a football match. Here, there are naturally three different possible outcomes; home victory, draw and away victory.

If we take a fictional football match with the odds 2.00 on home victory, 4.00 on draw and 3.20 on away victory as the example. If I want to win 100 dollars by betting on all three outcomes, I’d have to bet 50 dollars on the home victory, 25 dollars on the draw and 3.25 on the away win. This means I’d have to bet 106.25 dollars, or 6.25 % more than what would have been the case without the bookmaker margin.

The margin, of course, is where the bookmaker makes its money. If the odds from the previous example would have been completely fair and without margin, they would have been: 2.12, 4.25 and 3.40 with a chance estimation on 47.05 % on home victory, 23.50 % on draw and 29.40 % on away victory.

The image above shows the odds movements from the fourth round of the English Premier League. The first screenshot from Bet365 is taken at the beginning of the week, while the second screenshot shows the odds on the Sunday shortly before kickoff of the early matches. The arrows next to the odds shows whether the odds on the individual 1X2 outcome has increased, decreased or stayed the same.

As it can be seen on this example, some of the odds movements are quite drastic. The odds on Ipswich to beat Brighton, for example, fell from $8.00 to $5.75, meaning an early bettor here would have tremendous value based on the closing odds.

Opening Odds

No bookmakers are going to reveal exactly how they end up on their opening odds, but for the sake of simplicity let’s say that they are using an algorithm that takes a list of factors into account. These factors are things such as expected line-ups, team news, the team’s strengths and weaknesses, form, previous
performances, head-to-head results and similar relevant information.

Here is an example of the early odds movements in the Newcastle – Tottenham match from the third round of the Premier League in the 24/25 season. Kick-off was on September 1st, 2024.

The bookmaker Pinnacle opened their odds on the 18th of August with 1.98, 3.91 and 3.15 on home, draw and away. This means a margin on 7.83 %. If we remove the margin, the “real” odds should be 2.13 – 4.22 – 3.40, which would equal 46.85 % chance for home victory, 23.70 % chance for draw and 29.45 % chance for away victory.

Fifteen hours and five odds changes later, Pinnacle offered 2.19 – 3.95 – 2.80 on the
same match with a margin on 6.69 %. If we remove the margin, the odds would be 2.34 – 4.21 – 2.99, or a chance estimation of 42.80/23.70/33.50.

The reason behind the high margin is that the odds were published a week before the second round was even played, and that the bookmakers want to have a large buffer to cover for unforeseen events such as injuries, suspensions or surprise results in the 2nd match week.

In the 2nd round, Spurs defeated Everton 4-0 at home, while Newcastle drew 1-1 away against Bournemouth the day after. None of the results were that surprising, but the odds after Newcastle’s draw changed nevertheless. 2.43 – 4.18 – 2.57 with the margin down to 3.99 %. Removing the margin, the odds would be 2.53 – 4.35 – 2.67 and the chance estimation 39.60/23/37.40.

From the start of the second round to the end, the chance of a home victory had fallen with seven percentage points and the chance of an away victory increased by eight percentage points.

It is common knowledge, that the market consists of both amateurs and professional gamblers, and it is especially the latter that understands the value of getting early access to the opening odds. By identifying differences between the opening odds and your own estimations, or even just betting on the
differences between the bookmakers, the skilled bettors can early exploit the opportunity to secure valuable prices in the market before the odds are adjusted. This is especially valuable for arbitrage betting, where punters try to guarantee a profit by betting at the highest odds possible with different bookies to cover multiple outcomes of one particular market to guarantee a profit.

In the case of Newcastle – Tottenham, the skilled players likely put more emphasis on the expected goals in the round one match between Newcastle and Southampton than the bookmakers. Here, the 1-0 win for Newcastle, didn’t truly match what happened on the field. For Tottenham on the other hand, they were unlucky only to draw 1-1 away against Leicester, despite an xG “victory” on 1.41- 1.03.

Even though Newcastle won the previous match against Tottenham 4-0, in April 2024, the closing odds of that match were 2.65 – 4.10 – 2.48. The difference between these and what we saw as the opening odds in August, indicates that the opening odds were odd.

Nevertheless, opening odds in football usually have much lower limits for the bet sizes than what is allowed closer to the kick-off. Because of that, opening odds are not as important as many people think since the bookmakers are quick to react to early bets.

Early bets following the opening odds on football primarily come from professional bettors and large betting syndicates, and rarely from casual amateurs. This means the odds are quickly slashed and adapted before the market movements take care of the rest as we get closer to the kick-off.

Most bookmakers are copying the big companies such as Pinnacle and Bet365 and are afterwards adjusting the odds to suit their own customers. This means that the closer we get to the match, the more similar the odds become across bookmakers.

Some bookmakers want to have high odds on the favourites, but they are still forced to adjust to the market somewhat. A popular strategy is to offer odds 2-3 % over Pinnacle on certain outcomes.

Other bookmakers open their markets later than Pinnacle and then avoid playing around with the margins. They stay around the same level for the whole time, and only adjust the odds but not the margin.

The main reason for why bookmakers copy is that they don’t have much flexibility once the market is established. There isn’t a lot of movement space, because if they differ too much from the market, they will attract sharp action and risk losing a lot of money.

Smaller and new bookmakers, who either work with generally low limits or kick out winning players, can be a little riskier though, as they don’t tolerate winning players. Nevertheless, life is simpler and easier for them if they don’t skew too much from the market.

A bookmaker that differs too much from the market also opens the door for arbitrage betting, which means letting their players win risk free money. The bookmakers naturally don’t approve of this strategy since arbitrage betting is a way to exploit inefficient pricing.

A player doesn’t know what the closing odds will be when placing a bet. There are multiple factors that can influence the odds such as time to kick off, margin and the liquidity of the market.

Closing Odds

The closing odds are the most effective and precise representation of the likelihood of the outcomes on a betting event since they reflect all the information through the bets from the market.

The reason behind the effectiveness of the closing odds is that the so-called smart money from educated players and syndicates balances out the stupid money stakes from amateurs and casual fans. Had it not been for the smart money, the closing odds would be incredibly inefficient.

Right before kick-off, all the public information is available and the odds have been adjusted based on this information. Having access to information is useful, but not necessarily a requirement, to make money on betting in the long run, because it is the analysis and the understanding of the information that makes the difference when online betting in Australia.

The way one understands the public information is what makes the difference between a winning and a losing bettor. There are multiple skilled sports journalists with a ton of information who are terrible bettors. And there are multiple bettors with a positive balance that are betting at the market’s closing
odds because they are skilled at understanding the information in the right way.

A rule of thumb is that those who can’t beat the closing odds, by betting at higher odds than the market closes, are also losing money in the long run. For the same reason, the bettors who can predict the odds movements, and know when to bet at the right time, are also those earning money.

One thing to remember though is that for a bettor, it isn’t enough to just beat the closing odds. You also have to beat them by enough to cover the bookmaker’s theoretical margin. So if we take odds 2.00 on a two-way market, where a bookmaker offers 1.96-1.96, it isn’t enough to just beat the closing odds. Because while it is a 50/50 market, the bookmaker is obviously not paying it out like that.

Conclusion

By analysing the opening odds early through a series of in depth analysis, one can identify potential valuebets before the markets adjust. This proactive approach makes it possible to find early and valuable bets, which is an advantage for a bettor.

By keeping up to date with news, team news and team developments, the bettor can get an information advantage and predict odds development and take advantage of the expected changes over time.

Generally, it is an advantage to bet early on the favourites and late on the underdogs. But there are no rules without exceptions, which we also saw with the Newcastle – Tottenham example.

The goal is not necessarily to win every single bet, but to take decisions based on where one can find a expected positive value based on the closing odds.