A winning calculator is available for you to use before you place your bet, but keep
reading if you are interested in knowing how it works.
Odds are calculated with a "parimutuel" scheme: winners will get back
their wager plus the losing bettors' wager. So they are not being payed with the
bookmaker's own money but by the players that lose.
The losing bettors' total wager will be distributed to each winner in a way proportional to his
bet amount and the time left before the event expires.
So if a winner placed his bet earlier, he is going to get a bigger return than if he placed it later.
This is because it is harder to predict the outcome of an event with big anticipation
rather than doing it just before the event happens. Think about a sports match: knowing
the players' health state a few hours before the match gives you a useful
information that can help you predict the match outcome, while knowing their health state
one month before does not help.
Let's define your bet "Weight", a number between 0 and 1, for expressing this concept:
if you place your bet before the other bettors, your weight is higher than if you do it
after them and so you have a higher winning potential.
Weight = RemainingTime / TotalTime
Where RemainingTime = time span, in seconds, from the moment you placed your bet until the event expiration
And TotalTime = total event duration in seconds
Example event: Will the gold price be higher than $50,000 per Kg before next year?
Event start: 2017-10-01 00:00:00 GMT
Event expiration: 2018-01-01 00:00:00 GMT
Then TotalTime = Total event duration in seconds = 92 days x 24 hours x 3600 seconds = 7,948,800 seconds
If i place my bet at date 2017-10-04 00:00:00 GMT, there are 89 days left, that is 7,689,600 seconds
Then my Weight=7,689,600 / 7,948,800 = 0.96739
- i have bet 1 BTC on YES
- another bettor, Joe, bet 0.1 BTC on YES, and his bet has Weight 0.5
- 3 other people bet 1 BTC each on NO
- the event outcome will be YES, so that me and Joe are the winners
How much is my net win? The formula to be calculated is:
Net Win = LosingBet x MyWeightedBet / SumWeightedBets
Where LosingBet =
sum of amounts bet by the losing bettors, minus fee
= 3 BTC - 1% fee = 2.97 BTC
MyWeightedBet = MyBet x MyWeight / TotalWinnersWeight
MyBet = the amount i placed = 1 BTC
MyWeight = my Weight already calculated = 0.96739
TotalWinnersWeight = sum of all the winners' weights = 0.96739 + 0.5 = 1.46739
SumWeightedBets = sum of all the winners' weighted bets, calculated like MyWeightedBet
Now let's find MyWeightedBet = 1 x (0.96739/1.46739) = 0.65925 BTC
Let's calculate it for Joe as well. Joe's WeightedBet = 0.1 x (0.5/1.46739) = 0.034 BTC
So, my Net Win = 2.97 x 0.65925/(0.65925+0.034) = 2.82434 BTC
I am going to receive back 1 BTC (my bet) plus the Net Win calculated above. What about Joe?
Joe's Net Win = 2.97 x 0.034/(0.65925+0.034) = 0.146 BTC
So Joe is going to receive back his bet (0.1 BTC) plus his Net Win 0.146 BTC
NOTE: you will only win the coins from the losing bettors that used the same currency as yours.
For example if you bet with BTC and you win, you will receive coins from the losing bettors
that placed a bet with Bitcoin, but not from the ones that placed a bet with Litecoin or other currencies.
So it's like the bettors are divided into independent groups, each group using a different currency,
and the bettors in each group are challenging each other but don't play against other groups.