How Do Bookies Make Money?

It’s easier to conclude that the bookmaking business is lucrative, especially with the ever increasing number of bookies in recent years.

Online betting firms are cashing in billions since punters keep on betting and winning. The question often arises among bettors: How do bookies make money, even as they persist in paying out successful wagers and offering various inducements?

A popular and common misconception is that bookies only earn profits when bettors lose their wagers.

Bookies run successful businesses by converting profits into odds. They’re committed to ensuring that their books balance. It doesn't matter whether punters win or lose; the sportsbooks earn profits.

Key Highlights:

  1. Backing and Laying: Bookies profit from commissions on betting exchanges where punters lay and back against each other.
  2. Implied Probability: Bookies attract punters with attractive odds on unlikely outcomes, capitalizing on emotional betting and lack of analysis.
  3. Book Balancing: Manipulating odds and spreads helps bookies balance wagers, ensuring they win and lose some to reduce risks.
  4. Edge Through Odds: Bookmakers use software to set advantageous odds (edge), guaranteeing profits regardless of event outcomes.
  5. Losing Wagers: The inherent difficulty of winning bets ensures bookies consistently earn money from losing wagers.
  6. Risky Accumulator Bets: Bookies benefit from high odds on accumulator bets, increasing failure chances and boosting profits.
  7. Promotions and Bonuses: Bookies attract punters with promotions, using sneaky terms to encourage increased spending and secure profits.
how-do-bookies-make-money
Table of content

Ways Through Which Bookies Make Money

As a punter, you must have heard several versions of the phrase, “You will never meet a poor betting firm.” And you'll always wonder if sportsbooks always win. It’s challenging to beat the bookies by making a profit consistently. 

But you can do it! To be successful, it’s vital to understand the bookmaking mathematics and identify the techniques sportsbooks use to make sure they’re always at a huge advantage.

So, how do bookmakers achieve this? How do they manage to stack wagering odds in their favour to ensure they always remain ahead of the game?

Let’s discover some concepts that will help you find solutions to these questions. Once you find answers to these questions, you’ll be able to understand how your favourite betting site makes money and how punters can take advantage of this to earn massive profits.

Backing and Laying

Many betting firms are increasingly incorporating betting exchange platforms on their main websites. With exchanges, there are two sides to any wager.

Are you familiar with betting exchanges? You must have come across the options “lay” or “back” for any particular result on a given event. In order to back your predicted outcome, you need to find someone who’s ready to take the opposing stance. And this is what to lay the wager involves.

A betting exchange simply eliminates the middleman, which is the sportsbook, allowing punters to lay and back directly against each other.

An exchange betting platform earns a profit by taking a reasonable commission on each successful trade made between bettors on its site. This is one of the many ways that betting sites make money.

FAQ
❓ How bookmakers make money?

Bookies make money through commissions on betting exchanges, manipulation of odds, and the inherent difficulty of winning bets, capitalizing on punters' emotional decisions and lack of analysis.

❓ How much do bookies make?

The earnings of bookies vary widely based on factors such as the size of their operation, the volume of bets, and overall market conditions. Established sportsbooks can make millions to billions in annual revenue, while smaller ones may earn a more modest income.

❓ How do bookies balance their books?

Bookmakers manipulate odds and spreads to balance the amounts wagered on both sides of a bet, ensuring they can win and lose some, ultimately reducing their exposure to risks.

❓ What role do promotions and bonuses play in bookmakers' strategies?

Bookies attract punters with promotions and bonuses, often including sneaky terms and conditions, encouraging increased spending and ensuring consistent profits for the sportsbook.

❓ What role do betting exchanges play in bookies' profits?

Betting exchanges allow punters to lay and back directly against each other, with bookies earning a commission on successful trades, contributing to their overall profit margin.

Implied Probability

The implied probability that bookies assign to a particular incident represents the chances of a given event occurring. It is computed by multiplying the odds of a given outcome by the number of possible outputs. In many cases, outcomes with little chance of occurring tend to have attractive odds for punters.

Therefore, sportsbooks count on most bettors’ lack of skills and knowledge about various sporting activities to attract them into wagering with higher losing chances.

Most punters, especially die-hard enthusiasts of some athletes or teams, wager with emotions and fail to utilise statistics while analysing games. If their favourite teams or athletes fail to win, these punters lose their entire bankrolls. This enables bookies to earn more profits.

Book Balancing

Bookmakers use the book-balancing concept to earn money. Through this concept, bookies manipulate odds as well as point spreads.

They usually put the same amounts of cash on both sides of a wager so that they can lose some and win some. Let’s say that they had all their funds on one side, they would be sure to lose everything if that particular side lost.

sportsbook

By offering odds, bookies are able to reduce their exposure to multiple wagering risks. It’s a delicate undertaking because sportsbooks will, in some cases, accept wagers at lower betting odds and earn less profit.

Also, they lay wagers to balance out their wagering pool. If everything is favourable at those lower wagering odds, they can still earn a profit or break even.

Sportsbooks earn profits no matter who wins a wager since the odds aren’t set to be 50/50. These betting firms use complex software that provides them with a mathematical advantage. This advantage is commonly known as an edge. 

The odds a sportsbook offers on its online betting platform aren’t randomly selected. Experts carefully compute them to provide the sportsbook with an edge over their customers and make sure that they earn profits no matter the result of an event.

Losing Bets

Whether you’re a pro or a new bettor, you already know how it’s challenging to win a wager with the bookies. Surprises in the event scenario, increasing uncertainty in competitions, injured athletes or players, and more numerous factors are available that can make a punter lose a bet.

It isn’t surprising that there are numerous lost wagers than winning bets. That is how bookmakers make money.

Risky Accumulator Bets

The temptation of high betting odds from accumulator wagers offers a huge advantage to bookies. Tempting yet risky accumulator wagers allow bookies to win money and also avoid losing funds by increasing failure chances for the punter.

accumulator-bets

Bookies, in most cases, have special offers that provide extra winning chances to successful accumulators. This depends on the amount of legs available in the wager. Bookies use this technique to encourage punters to place wagers that have very competitive odds. 

This means reduced chances of success. A thought of huge wins can see punters placing wagers that they shouldn’t be making, providing bookies with the chance to earn profits.

Promotions and Bonuses

Betting sites usually offer promotions and bonuses. While they tend to use the term “free”, these promotions and bonuses come with terms and conditions that many users don’t read and understand. Most of them usually come with sneaky terms and conditions. 

For example, a free bet is a popular and common promotion. Some bookies will give new players a match offer on their first deposit to a certain value and free bets. However, it comes with some comprehensive wagering requirements that many punters fail to read and understand.

For a punter to win the “free cash”, they must wager dozens of times before they can withdraw any earnings from their account. Many players who claim such bonuses and promotions spend significant amounts of money chasing the play-through requirements than their initial budget.

These promotions attract more punters who develop a loyal user base that allows sportsbooks to explore new markets and expand as they make more money.

Final Thoughts

If you understand how bookies make money, you can easily recognise when one is offering poor value. This will help you find a bookie with competitive odds. At the same time, you’ll be able to develop a strategy that will enable you to become a successful punter. 

Keep in mind that bookies accept wagers on a market and price it in a manner that doesn’t represent the true possibility of the results. This overround, or margin, provides them with an edge over punters.

Dalius Mikalauskas

Sports Betting Expert

Dalius became interested in sports betting at the age of 16, although he could not place bets at that time (bets accepted from the age of 18). However, it was not forbidden to sell betting picks, which is what the author did actively on sports betting forums. Today, he has more than 18 years of experience in sports betting. In school, the auth ..
100 € Esports bonus
Your luck is on vacation
3 BTC bonus
1500 € bonus
100 € bonus
Up to 19 000€ bonus
×

SPIN THE WHEEL AND WIN BONUS!

Enter your details to see what you have won.

A voucher to claim your prize will be sent to your email address.

WOW, YOU DID IT!!!

Congratulations, you have won!! We have sent instructions on how to claim your prize to your email address. Thank you for participating!
Win a prize