I came across an example of a job interview question related to betting and want to ask the opinion of experts as my betting knowledge is very basic.

Here is the question:

"Do you think favorites in the English Premier League are undervalued in the betting market?"

Is this true? if yes, why?

My guess:
Assuming it is true statement, it would be because the bookies are trying to discourage betting on favorites where the probability of them winning is bigger (giving bettors odds less than the probability of a win) and tempting people to bet on underdogs where the probabilities are lower (giving bettors better odds than the probability of a loss), therefore maximizing their profits.

That would be the gist of it.
Would my guess be close to the answer to this question?
Plus, how this would be relevant in the world of constantly changing odds?

  • what is wrong with the question?? why downvote?
    – Chris
    Nov 6 '16 at 11:14
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    Hi Chris, and welcome to Sports SE. From what I can tell, questions about sports betting and gambling certainly are on topic, as per 'What questions can I ask here?' in our help centre, and this and this question in meta. Nov 7 '16 at 3:40
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    To the downvoters: whilst downvoting questions that are effectively unsalvageable without leaving a comment is fine, I think it's very poor form to do so here (particularly when it's a new user), when a quick comment can result in the question being improved and contribute further to the quality of this site. Nov 7 '16 at 3:43
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    Hi Chris, see if my edit makes sense to what you are asking please? You're suggesting they give bad odds for favorited teams so that less people bet on them, so when they win, the bookies give up less money? Nov 7 '16 at 4:59
  • @ JeopardyTempest, that's exactly what I meant. However as Coach-D below explained and how I understood it that might be only one of many possible scenarios. How often the bookies really follow this scenario is another story.
    – Chris
    Nov 7 '16 at 21:17

It is really simple. A books goal is to get half the action on each side, for all pure win/loss bets. They make their money on juice not guessing which side will win.

It does not matter if favorites make the most money for bettors on average. It is all about getting an even amount of action on each side.

So the answer is possibly yes if it met certain conditions - covered more than juice - but it wouldn't matter long as the market (books) would adjust quickly.

(Just a tidbit but there were years straight that you could have won a lot more games than lost by just picking underdog every game in American football. The books didn't care because people kept betting the favorites. Maybe they were trying to make a 50/50 win-loss line or maybe the books were systematically adding a point or so to each game. Each big book in Vegas hires a person to set the lines and then the lines move if the book is experiencing too much risk based on one side getting most of the action - but when the lines move the book can lose both ends)

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