The subtleties of Asian handicap betting

I’ve always had an aversion to Asian handicap betting, simply because the outcome isn’t intuitive. For example – a bet on Middlesbrough to beat Spurs is immediately understandable, a bet on Middlesbrough to beat Spurs with a handicap of 0.75 isn’t. However – there are circumstances where Asian handicap (AH) odds can be more attractive than the basic home, draw, away odds – but it pays to be aware of the subtle differences.

The betting internet is awash with explanations of how AH’s work. The ever-reliable Wikipedia’s explanation is here. However, the point of this piece isn’t to explain AH odds, but to describe what to be aware of when using them. The AH system essentially uses the handicap to manufacture odds to suit the bettor’s (and bookie’s) risk profile.

Take Spurs v Middlesbrough (04/02/2017) as an example. I modelled the chances of a home win as 74%, draw 18% and away win 8%. Market odds for an away win were 14.0 – so, as 14*8% = 1.12, I thought that there was a 12% expected return. But, even though there looked value, a bet on Middlesbrough was still risky – with a 92% chance of losing! Even where value exists, betting on underdogs is dangerous because it increases the likelihood of bankroll bankruptcy. This is where AHs are useful, because the handicaps can create value odds with better risk profile.

The chart below shows the likelihood for increasing handicap amounts for Middlesbrough (from my model).



This illustrates how the combination of 0 (draw void), 0.25 (split bet) and 0.5 handicap multiples create a gradually increasing outcome likelihood, in 0.25 handicap steps.

The most popular AH for a particular match is usually the one that’s closest to a 50/50 likelihood, so +1.25 or 1.5 to Middlesbrough in the chart above. And this is one of the most attractive features of AH odds – the ability to recalibrate the outcome of every match as an even two-way outcome. This gives two main advantages over traditional home, draw, away odds:

  1. AHs allow better risk management for the bettor (and the bookie)
  2. AH odds are often tighter, with higher limits than traditional 3 way odds. The reason for this is connected to the first advantage – because AHs should allow bookies to better control their exposure and risk, so accept smaller margins.

But Asian Handicaps are not always a better option than backing home, draw or away.

The biggest difficulty for punters is assessing the true likelihood of AH odds (essential to determine value). In football, a team’s motivation has a significant effect on the likely outcome – e.g. does the team need to win, or will they be happy to accept a draw? It’s essential to understand a team’s motivation when estimating the likelihood that they will win, lose or draw – and this helps assess value. But, for AH betting it’s far trickier to apply motivation to the outcome because teams aren’t (usually) motivated to win or lose by, say, at least a 2-goal margin.

So, when assessing value in AH odds it’s important to take account of the full likelihood distribution of results – is your favoured team likely to settle for a one goal win or will they go for more goals? If a team’s win odds are good value, it doesn’t necessarily translate to the same value in their AH odds.

Also, the “Draw” is often a frustrating outcome for bettors, and one apparent benefit of AH odds is that they can eliminate the draw outcome. A +0 handicap results in a void bet. But this doesn’t necessarily equate to value odds. For any match the draw outcome may or may not offer value, so eliminating the draw as an outcome only makes sense if the draw odds are too small.

So, in conclusion, Asian Handicaps are a great tool for punters. But it pays to be aware of their subtleties.

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