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How Bookmakers Work: Learn how the bookies make money

 

 If you ask the average person (and even some intermediate punters) how do the bookmakers work, the most common answer to this question will be - from loosing bets. And at first look this makes quite a bit of sense - the bookies make money when the bettors lose their wagers. And while this is somewhat true, this is not how the bookmakers make their profit.

 In actuality, the bookmakers' goal is not to have their customers lose their bets, but to match one punter against the other, then take a fee for it. Let' look at some real life examples to help you understand how the bookmakers work. While the bookies employ professionals to help them with the betting odds, the goal of the bookie is to have an equal amount of people betting on each side of the bet and the amount of money lost by one group should be equal or higher than the amount won by the other. For example, let's say that you are given a deck of cards and have to bet on whether the fist card will be Red or Black. Statistically, 50% of the time the card will be Red and the other 50% - Black. Using decimal odds, this would be represented by 2.00 odds on red and black and this type of fixed odds will be called "100% market". If the bookies made money from people losing their bets, they will simply post odds 2.00 on both Red and Black and hope for the best. The bookmakers, however, don't remain profitable by simply gambling with their money, that's the customers' job :) In the case above, the bookie will offer odds which are slightly below the statistical odds, for example the payout on Red would be 1.81. By "pocketing" this small percentage from thousands of bettors, the bookmakers make money.

 It's even easier to see how this works in real life by using an example from the NFL betting world. Both American and UK bookmakers will offer odds on the over/under, where both sides, over and under, pay out on the same betting odds. usually 10/11. As you can see, the statistical odds should be 11/11 (i.e. 1/1), but the bookmaker is offering 10/11 and if if they manage to match both sides with equal amount of bets - they collect a "vig" or "juice", in other words they take this small discrepancy between the statistical and betting odds as a fee for bookmaking. Now, this said, if they have more losers than winners 0 that's just great for the bookies, but this is not how they primarily make money. If you want to see the percentages for any bet, we recommend trying out the Pinnacle Sports betting calculator. There you can input the odds offered and it will calculate the market percentages for you.

 So what of one side of the bet gets more wagers than the other? Then the odds change. This is why one can often see the lines move, especially as the sporting event in question nears start. Sometimes this could be due to unexpected news, but most of the time the odds change as a result of punters betting more heavily on one side of the bet than the other. The bookmakers will then try to level off this difference in wagers by offering better odds to the other side of the bet. You can learn more about the betting odds by following the link below.

<< Back to Guides | or read this related guide: How Odds Work: How betting odds work

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