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How Bookmakers Make Money: What You Should Know

Bookmaking is a lucrative online sportsbook business that many people consider to venture into. That’s why the number of bookies in the sports betting industry has increased and still counting now that online gambling has been authorized. You may be wondering how bookmakers make money.

What is Bookie?

The word “bookie” is a short term for “bookmaker.” It’s an individual (or company) who manages online betting, usually on sporting events. He sets odds, takes and places bets, and pays out winners.

Understanding How Bookmakers Make Money

As you fathom how bookies make money, you will notice if they are offering deprived value when compared to an exchange. Most bookies accept bets on most chief sporting events. The most marketable sports bets that bookies handle include:

  • Football
  • Baseball
  • Basketball
  • Racing
  • Boxing
  • Golf
  • Tennis
  • Casino and many more

Some of them broaden the types of bets they offer which are not related to sporting events. One example is the result of political elections or who will be the winners in the Oscars Awards.

Ways How They Make Money

How bookmakers make money is a culmination of skills, wit, dedication, and hard work. There are many ways how bookmakers make money and these are as follows:

  • Setting and Calculating Odds

Setting and calculating odds are one of the most important ways how bookies make money. They do this to ensure that they will win in an event. These calculations are sometimes dependent on casino-developed analysts or those that handle risk calculations.

Bookies adjust lines and spreads of a particular game or tournament based on diverse bets. However, there are factors that could affect the odds such as players getting injured, drugging rumors, or poor weather.

Bookies have various ways of adjusting odds. This is usually done after receiving the initial bets as a way of how bookies make money. A few of them will instantly begin adjusting the odds according to the amount of money being wagered on each outcome. 

Accordingly, they will reduce the odds of a particular outcome, making it less well-favored to bettors. This way of how bookies make money will instead level up the odds of other outcomes. This is to even the total amount of bets. The bookie’s calculation of the vig and tracking odds adjustments can offer profitable opportunities to watchful bettors. 

As a bettor, you need to be extra careful and up-to-date before placing your bets on higher odds. It’s because it’s possible that a change might have developed due to some circumstances such as player injury.

However, a golden opportunity can happen if a bookie offers value odds. For instance, if a bookie begins offering odds on an “away win or draw,” to ensure commission, a bettor can bet on these 2 results. At the same time, the bettor can seize the improved odds. He can even settle an initial “home win” bet.

How Bookmakers Make Money

  • Balancing the Book/Betting Margins

The best example to explain how bookies make money on this matter is a coin toss. The possibility of landing on whichever side of the coin is 50%. This means the odds must be valued at 2.0/2.o on both sides. If you place a bet of $100 to win $100, it will be a 100% market. 

How bookies make money doesn’t make them offer the true probability of a match since it is not their concern. They value markets to go rather beyond 100% which creates an advantage in their favor. The difference in the cost offered from the “true odds” is the bookie’s margin.

In regard to the coin toss, a bookie will offer heads or tails at odds under 2.0. This means a player needs to bet more to gain $100. 

Bookies usually don’t show the market overround just like a betting exchange does. That’s why it’s important to compute betting margins. As soon as you are able to calculate the margins, you’ll be able to distinguish and note the diversification among bookies. Moreover, you’ll be able to know how it can dramatically affect your possible return.  

Value betting is linked to the market in its entirety. This means that you have to consider the odds of all game results. When the margin is bigger, the total value for bettors will become poorer. This is one of the ways of how bookies make money.

  • Imposing Bookie Fee or Vigorish

Vigorish comes in several monickers such as bookie fee, juice, take, or cut. Whatever term you call it, it’s the same as the amount a bookie charges on each placed bet. This is the most popular way of how bookies make money. 

Usually called vig for short, only a few bettors knew how to compute precisely the vig of each betting site. You may hear from other bettors say that “this bookie has a high vig” when they compare betting sites.

Bookies impose a bookie fee to ensure a specific profit on any games or match whatever will be the outcome. It doesn’t matter for them which side will win. How bookies make money is to balance the overall amount of bets to guarantee themselves of a little percentage. It’s the main reason why bookies generally change the odds and lines. Calculating the vig is the initial step that every bookie takes before adjusting the odds.

Although the vig depends on the bookie’s overall expenditures and various kinds of markets, there is no standard amount. Asian bookies charge a vig of about 2% to 5%. International bookies, on the other hand, usually set an average vig at 10% on each event.

  • Compounding

The basic principle of compounding is that people focus on a specific, little amount between 1% to 5% of their funds regularly. This means that bettors like you can place bets that have a bigger possibility of winning. 

Compounding, as one of the ways how bookies make money, is not just a procedure or system of sports betting. There is a bigger foundation to ascend income in the coming years.

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