How Do Bookies Make Money?

Ever wondered how do bookies make money? It involves balancing their books, setting the right margin lines, and charging a commission for bettors. They receive what’s known as a vigorish, or the vig, which is a certain percentage deducted from the gamblers’ winnings based on the game’s odds. The key to making money as a bookie is balance, and a good portion of achieving that goal teeters on how well you can read bets, your level of comprehension of the game, and how well you keep odds in your favor.

Despite what some may think, only some of this process relies on chance, and it wouldn’t be correct to say that a majority of a bookie’s success rests upon this. In order to understand how a bookie will adjust odds and margins, it’s crucial to know how people make money betting, in general. Let’s use online football betting as an example, the season is coming up after all.

When using the American odds format, bettors will see that one team will typically have a minus sign and one will have a positive sign. These signs indicate that when betting on negative odds, that number is how much you must lay in order to receive $100 profit while betting on positive odds means that number is how much you might make if you lay down a $100 bet.

To illustrate this, let’s say you’re betting on a game between the New England Patriots and Miami Dolphins; the Patriots have a -2.5 handicap with odds of -124 and the Dolphins have a +2.5 handicap with odds of +112. You bet on the Patriots, placing a $124 bet (same as the odds!) on odds that are -124. Should they cover the spread, that means you’ve made $100 on the bet, plus your original buy-in. Or, let’s say instead you bet on the Dolphins by laying down $100 on odds that are +112. Should they win, you’ve just made $112 plus your original stake. While this is a pretty simplified example, it captures the basics of how people profit off betting. So, where the does bookie come in?

Since the art of bookmaking relies on taking more money in than paying out, a savvy bookie would build the vigorish into the book itself. Essentially, they will adjust the payout margins for each side of the bet using what is essentially a sales commission. For instance, if you place a winning $10 bet on odds of 1.9091, then your net return would be $19.09, with your profit being $9.09 and plus your original stake. Where does that remaining $0.91 go? Right into the pocket of the bookie, and it’s through this margin setting method that a bookmaker will return a profit regardless of the game’s outcome. The book is now balanced.

It may seem very confusing at first, but once you understand the concept of adjusting odds, then it’s very easy to see how bookies profit. However, there are now online services and pay per head betting software for bookies that you can purchase to streamline all these adjustments and to manage accounts with ease. Those already established, and those learning how to start a bookie business can now receive professional assistance through our software platforms that will organize, manage, and report on all of your accounts. Check out what we can offer you, and further legitimize your betting company now!

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