Smarkets is different from most sportsbooks. Traditional sportsbooks hire oddsmakers who go through a painstaking process to do two things:
- Determine how likely an event is so they can set odds.
- Determine how much house advantage to spread across sportsbook lines.
However, Smarkets does something completely different from its competitors. Smarkets lets its bettors set their own odds. Then, those bettors trade bets with different odds on a betting exchange. That way, bettors wager against each other.
Those bettors also make better odds than Colorado’s other seven (as of this writing) sportsbooks.
How Much Better Are Smarkets’ Odds Than Its Competitors?
In some cases, much better. Here are the Colorado sportsbooks’ lines on the Betis/Sevilla La Liga match:
There are other lines where Smarkets doesn’t dominate like this. For whatever reason, baseball lines are competitive among Colorado’s sportsbooks. However, Smarkets’ odds are strong across the board, and they give sportsbooks a run for their money in every sport and league they offer lines on. Smarkets has the best odds across the board on this line. Its negative odds are closer to even, so bettors only have to wager $105 to win $100. Its odds on the draw and underdog also have higher payouts for the same result. If Real Betis comes through, then bettors would win more betting at Smarkets than any other sportsbook.
How Bettors Wager Against Each Other In Smarkets’ Sportsbook
Smarkets’ UK bettors can set their own odds and trade bets with each other. There are a few firms that are particularly influential on the betting exchange, which gives smaller bettors an idea of what a good bet is. It also helps combat team loyalties. Ask a Broncos fan and a Patriots fan how likely their team is to win, and they’ll both say their own team.
Smarkets also has a social media aspect. Bettors can see other users’ past bets and whether their recent bets were big wins or embarrassing losses. Users can also write their own betting tips to share with the Smarkets community. As a result, Smarkets gives its best bettors a platform to gain a following and become influential oddsmakers themselves.
How Does Smarkets Make Money Instead?
Most sportsbooks make money by building in a house advantage to their lines. In a sportsbook line, every set of odds is a probability. If the Broncos have +100 odds on a win, that means the Broncos have a 50% of winning. If you calculate the odds on any sportsbook line, they will always be a little more than 100%. That’s because the odds are tilted in the sportsbook’s favor so they can expect to make a profit on every line. (And recoup their losses when an underdog comes through.)
But since Smarkets bettors are setting the odds, the odds are closer to fair. That’s great for bettors, but it creates slim profit margins for Smarkets on each line, like these:
|Expected Profit Margin|
Instead of profiting off individual lines, Smarkets makes its money from its betting exchange overseas. Coloradan bettors get the benefit of amazing odds from Smarkets’ sportsbook without the commission fees that U.K. bettors pay on the exchange. That way, it doesn’t matter which team wins. Smarkets can remain profitable while they offer competitive odds.
Why Don’t Colorado Bettors Get To Set Their Own Odds?
When Colorado bettors download SBK, Smarkets’ sportsbook app, they’ll notice that it looks like the other sportsbooks. It’ll be sleeker than any of the other sportsbook apps, but there won’t be an option for Colorado bettors to set their own odds.
What gives? What’s this whole article been about then?
Smarkets’ sleek new sportsbook is part of its soft launch. It’s using its sportsbook to get early feedback from customers about its app’s performance. Since registering to review Smarkets, I’ve gotten emails inviting me to send feedback about the app. (It supposedly sends an email directly to the Smarkets CEO with open-ended feedback.) Despite having processed over $15 billion in bets, Smarkets retains its personal small business feel.
Coloradans also won’t get access to the betting exchange where bettors pick their own odds because of the Wire Act. It prevents betting information from crossing state lines to place wagers. Combined with each state legalizing sports betting individually, betting exchanges can only get so large. But if Smarkets’ betting exchange makes it to Colorado, then it’ll be the first betting exchange in the Rocky Mountain State. (C’mon Betfair.) Then, Colorado bettors can be part of the interactive oddsmaking process that makes Smarkets such an exciting market entrant.
While Smarkets’ odds are among the best in the state, there are leagues where the other sportsbooks redeem themselves. The Chinese Professional Baseball League odds are one of Smarkets’ weak areas:
|Uni Lions||Rakuten Monkeys|
When a sportsbook like BetMonarch decides to offer the best odds on a specific sport, it can compete against an exchange that offers amazing odds across the table. However, BetMonarch must take larger profits on other sports lines to make up for their strong odds on baseball. That makes the odds worse for bettors on those other sports. Smarkets is two points shy of the best underdog odds. However, the odds on the favorite aren’t close. It’s 33 points behind the leader, BetMonarch. BetMonarch’s sportsbook specializes in baseball odds, so BetMonarch taking the lead on a baseball line is unsurprising.
Smarkets doesn’t have to make those same compromises, so it can remain a strong choice for bettors who don’t want to compare odds across sportsbooks. But Smarkets has a weakness against sportsbooks who find niche sports to provide competitive odds in. It’ll be interesting to see how the other sportsbooks adjust to Smarkets competitive sportsbook odds and–eventually–its even more competitive betting exchange.