Taking advantage of errors in models
All sports betting models have their limitations. They can only assign a likelihood for a certain outcome, not predict the future with a 100% accuracy.
When bookmakers use models to set their odds, a skilled punter can exploit the limitations of the models. A bookmaker might for instance fail to pick the ideal model for a certain situation, and end up with odds that you can exploit for your own gain. If the bookmaker for instance is using normal distribution to set the odds for home team goals scored in a match, you might end up with a more correct estimation by using another method that is more suitable for this situation.
Another common source of error is to not use the most relevant parameters. Let’s for instance assume that a soccer team recently won a Bundesliga match by 10-0. This is a very abnormal situation, and if a bookmaker automatically includes this parameter when dealing with the Poisson Distribution, the bookie can end up with a very strange result. Always keep an eye on standard deviation for parameters.
Sporting events includes humans, weather and other ever shifting factors. The same match can never be played twice, but we still – in a away – pretend that this is the case when we try to use historical data to predict the future. There is always a natural volatility inherent to sporting events. If a bookie relays too strictly on a rigid sports betting model to set the odds, you can exploit this by being aware of subtle and not so subtle differences.