Last updated on July 30th, 2023 at 04:58 am
Have you ever asked, “How does a bookie make money?” You know, those guys who take bets on sports games, horse races, and other events. How do they always seem to have enough cash to pay out the winners and still make a profit? In this tutorial, we will explain the basics of how a bookie operates and what factors influence their earnings.
First, let us define what a bookie is. A bookie accepts bets from people on various outcomes of an event, such as who will win a game, how many points will be scored, or which horse will finish first. The bookie sets the odds for each outcome, determining how much money the bettor will win or lose, depending on the result. The bookie also collects the money from the bettors before the event starts and pays out the winners afterward.
The bookie’s goal is to balance the bets on both sides of an outcome so that they do not have to pay out more than they collect. For example, if a bookie takes 100 bets of $10 each on Team A to win a game and 100 bets of $10 each on Team B to win the same game, they have a balanced book. No matter who wins, the bookie will collect $1000 from one side and pay $1000 to the other, keeping the difference as their profit. This difference is called the vig or the juice, usually around 10% of the total amount wagered.
However, balancing the bets on both sides of an outcome is not always easy. Sometimes, more people want to bet on one side than the other, creating an imbalance in the book. For example, if a bookie takes 150 bets of $10 each on Team A to win a game and only 50 bets of $10 each on Team B to win the same game, they have an unbalanced book. If Team A wins, the bookie will collect $2000 from one side and pay out $1500 to the other side, making a profit of $500. But if Team B wins, the bookie will collect $2000 from one side and pay out $2500 to the other, losing $500.
To avoid losing money from an unbalanced book, a bookie can adjust the odds for each outcome to attract more bets on the less popular side. For example, if a bookie initially sets the odds for Team A to win at -110 and Team B to win at +110, meaning that a player must wager $110 to win $100 on either side, they can change the odds to -120 for Team A and +120 for Team B. It means a player must wager $120 to win $100 on Team A and only $100 to win $120 on Team B. That makes betting on Team B more appealing and on Team A less attractive, which can help balance the bets on both sides. Also, the best sportsbook PPH providers can balance the sides for you.
Understanding How a Bookie Make Money
One way a bookie can avoid losing money from an unbalanced book is to lay off some of their bets with another bookie or a betting exchange. For example, if a bookie has too much exposure to Team A winning a game, they can reduce their risk by placing some bets on Team A with another bookie or a betting exchange offering better odds. This way, if Team A wins, they can offset some of their losses with their winnings. And if Team A loses, they can keep some of their profits from their original bets.
As you can see, being a bookie is not as simple as it may seem. It requires a lot of skill, knowledge, and luck to make money from taking bets on various events. A bookie must deal with unpredictable outcomes, changing odds, and competing with other bookies and bettors. To help you handle the sportsbook, you need to use a bookie pay per head service.