Nevertheless, my point was that they are leaving money on the table.
This was actually an interesting problem, so I whipped up a program to simulate the effect of laying off imbalances or not. Generates a series of 100,000 drastically simplified events with random bets on each side and resolves randomly with or without laying off.
Code:
Book profit with no layoff: $461158.9, $4.611589/game
Book profit with layoff when larger is 2x smaller: $504696.5, $5.046965/game
Book profit with always layoff any imbalance: $584215.8, $5.842158/game
Suprisingly, laying off didn't make
that much of a difference. I mean, the difference between not laying off and laying off all the time clearly increases profit, but only by between $1 and $2 per game. My guess is that the time required to make the layoff bet, fund the transaction, transaction fees, its not worth it for a local bookie. If it were me, I'd just do it for BIG imbalances, maybe where my negative liability is greater than 10% of my bankroll.
Bigger books, especially computerized ones, take note though. Money is left on the table if you leave a book unbalanced.
Code attached if interested. The calculation of exactly how much to lay off to equalize the profit is suprisingly simple (assuming you can get 10/11 at the same spread of all your taken bets).
Code:
layoff_dollars = (1 - larger / smaller) * smaller
podonne