Adkins now odds-on for Leeds job: Is he a nailed-on certainty? TSS March 18, 2013 Leeds United 39 Comments Nigel Adkins is now 4/11 with Sky Bet to be next permanent Leeds United manager. The former Southampton manager has been considered the frontrunner to succeed Neil Warnock ever since the markets opened, but he started Sunday at 4/1 before his odds fell dramatically, finishing the day odds-on (4/11) with Sky Bet. So what caused such a sudden shift, and does this mean Leeds United have already found Warnock’s replacement? To determine that, you have to understand the methods bookmakers use to calculate their odds. Basic method of setting odds Early bookmakers odds are based on the likelihood of an outcome and are altered according to where money is being placed. Since there has to be a winner, they try to spread their potential liabilities as evenly as possible. Say for example, bookies are asked to offer odds on the result of a coin toss. There are only two possible outcomes. The likelihood of it landing heads is equal to tails, so the bookies would offer evens on both. (Slightly less than evens actually to ensure profit, but we’re going to ignore that for this example) Even odds mean that if you bet £1, you win £1. Your initial £1 stake is also returned, so you double your money. So long as customers have bet evenly between both outcomes – 50 people bet £1 on heads, 50 people bet £1 on tails – the bookies can’t possibly lose money no matter which way up the coin lands. The odds will remain even while ever customers bet evenly on both possible outcomes, but if that changes, the odds will too. Another coin flip takes place and the bookies offer the same odds. This time however, 80 people have bet tails, and only 20 have bet heads. If the odds remained evens for both outcomes, the bookies would need it to land on heads for them to profit. Their bases are no longer covered and by keeping the odds even, the bookies are gambling with their own profit and losses. But the bookies don’t gamble. Not if they can help it anyway. It’s a tad ironic I guess, but in most cases the only people not gambling is the bookmakers. To ensure they don’t lose money whatever the outcome is, the bookies will alter their odds. Since a lot of money has been placed on tails, they’ll reduce the odds available to 1/5, meaning you’d only win £0.20 for every £1 you bet. The odds on heads meanwhile will be much more attractive since they won’t lose money on that outcome. On heads, the bookies offer 2/1. In theory, this should level the betting. People will stop placing money on the outcome which offers the least potential reward and start placing money on the outcome which offers them the highest possible return. The bookies liabilities will eventually level out for each possible outcome and the odds will level accordingly. How manager and sports betting differs The above example would work perfectly well for a coin flip or for any event where the possible outcomes are equal. But football isn’t that black and white. If Manchester City are playing Burton Albion, every football fan in the country knows that both teams can theoretically win, but 99 times out of 100 Manchester City will walk it. Manager betting is no different. Presented with a list of 100 names, we know that it’s theoretically possibly for them all to be appointed the next Leeds United manager, but very few people are going to look at the list and think Roy Keane is a good bet at 50/1. The chances of it happening are almost zero. This is where things get a little trickier for the bookies and other factors are taken into consideration. While they’ll still be trying to cover their bases by altering odds according to where money is bet, they’ll also factor in the same knowledge we do when setting out their odds, so while there may be 100 possible outcomes, every possibility isn’t equal. Since Roy Keane’s appointment is incredibly unlikely and very little money will be placed on him, 50/1 odds won’t hurt them. Hell, 5000/1 odds wouldn’t hurt them. The more likely candidates are where things get complicated. This is where the bookies could really be hurt if they don’t react quickly to speculation and where the money is being placed. At 10am a bookmaker can be offering 4/1 odds on Nigel Adkins knowing they have every liability covered (they profit no matter what the outcome is), only for a sudden surge of money to be placed on Adkins leaving the bookmaker exposed if Adkins is appointed. Here the bookies would use the exact same method they used for the coin toss, making odds on Adkins far less attractive so people stop betting money on him, while making odds on everyone else more attractive to cover the potential loss of an Adkins appointment (note how Di Canio, Poyet and Southgate’s odds became more attractive as Adkins crashed – this is where they want you to bet). But the bookmakers don’t want people to stop betting completely, so a market is never closed until the outcome is determined or unless there’s no one around to react and alter the odds (many online bookies close betting overnight for example). Why people are so caught-up on bookies odds… At first glance, it may seem bookies odds are driven by nothing more than fan speculation. If fans believe Nigel Adkins is GFH’s most likely choice then it stands to reason more money will be placed on him. And it’s true, the bookies do consider this. They employ people whose sole duty it is to understand their customer and how they’ll bet – people with a good knowledge of the market who are basically tasked with researching you. But this knowledge only goes so far, and in some cases, only helps bookies after the fact. If Salem Patel hints at Nigel Adkins and we all start piling money on him, by the time the bookmakers have reacted it may already be too late. That’s why the bookmakers don’t hang around to see what we do and can be considered as valuable a source of information as respected newspapers, because like the best newspapers, bookies employ experts to obtain and analyse valuable information on their markets. Bookmakers use a combination of complex mathematics, well-sourced information and expert opinion to ensure they profit no matter what the outcome is. So is Nigel Adkins a nailed on certainty? For the odds to fall so sharply it either means a lot of money has been placed on Adkins (relative to the rest of the field) or the bookies know something we don’t. Personally, I’m leaning towards the first possibility. Last time Leeds United found themselves looking for a new manager, there was plenty of strong candidates that the press and fans considered to be in contention. No two fans wanted the same man and no one knew what to expect, so money will have been spread across the board. This time round 99% of the speculation has centred on Nigel Adkins, with many fans considering it to be a foregone conclusion. Without any reasonable and likely alternative, where else would fans be placing money? It’s seemed like a one horse race. Sure, you could argue that Gus Poyet and Paolo Di Canio are possible alternatives, but Poyet is less likely than Adkins because he’s already employed while Di Canio is an unpredictable madman – few chairman are going to take a chance on him. This could explain why Gareth Southgate appeared from nowhere to become 6/1 second favourite earlier in the day. The bookies may have added him to create speculation themselves, hoping that it would take the attention away from Adkins and force fans to consider (and bet on) other possibilities.