If people predominantly bet for one side, the odds have to lower so the house still wins in either case. Basically, there has to be enough taken in on all other options to cover the payout of any winning option.
If there’s no selection bias in betting skill level of the players, then the betting odds should roughly reflect the actual probability. But if one side’s bet has no basis in reality, then the odds can get very skewed.
And in those cases, it’s not the oddsmakers that are wrong, it’s the betters. The house always wins.
In a horse race, punters tend to spread bets across horses with no bias or favouritism - they place the bet because they want to make money, not because they are invested in the outcome.
In a political race, people bet for one team because they are ideologically aligned and want to show support.
If Republicans are much more likely than Democrats to gamble and place bets on their candidate, this creates market pressure and the odds for a Republican win will increase (I.e. get more likely) as a result of that.
I don’t think that’s how that works.
If people predominantly bet for one side, the odds have to lower so the house still wins in either case. Basically, there has to be enough taken in on all other options to cover the payout of any winning option.
If there’s no selection bias in betting skill level of the players, then the betting odds should roughly reflect the actual probability. But if one side’s bet has no basis in reality, then the odds can get very skewed.
And in those cases, it’s not the oddsmakers that are wrong, it’s the betters. The house always wins.
Exactly.
In a horse race, punters tend to spread bets across horses with no bias or favouritism - they place the bet because they want to make money, not because they are invested in the outcome.
In a political race, people bet for one team because they are ideologically aligned and want to show support.
If Republicans are much more likely than Democrats to gamble and place bets on their candidate, this creates market pressure and the odds for a Republican win will increase (I.e. get more likely) as a result of that.