Understanding how the bookie gets paid in betting
As a bookie or bookmaker, you need to be aware of a study by the American Gaming Association found that 50.4 million Americans planned to place bets on the 2023 NFL season. This is 15% of all adults who bet on professional football. This is a large potential client base for bookies.
While it’s nice to win, the real money is in bookmaking. You won’t be tempted to gamble again once you understand the benefits of betting. You will want to become a bookie.
What do bookies or bookmaker do?
Before we look at how bookmakers, or “bookies,” get paid, let’s take a look at what bookies do. So, in other words, why should bookies be paid?
The bookie, or bookmaker, is the person or company that sets the odds and takes bets on sports events or other outcomes. The bookie’s goal is to make a profit by ensuring that the amount of money wagered on each side of a bet is roughly equal, so that they can collect a commission, or “vig” (short for vigorish), on the losing bets.
A bookie facilitates gambling. They allow people to place wagers through:
- Setting the odds (and sometimes altering them) is a good thing. But more later.
- Accepting and placing bets
- Redeeming winnings
Bookies are often seen as shady characters in popular culture. Many movies feature bookies sending goons to help problem gamblers who can’t pay.
Even though sports gambling is legal in some places, real bookies are not like them. Most bettors still place their wagers at local bookies, even though legal gambling is available. They would soon lose all their customers if these bookies fell on their knees.
A bookie is simply someone who makes it possible to gamble. They charge a fee, just like any other person who offers a service.
Betting explained: The Vig
The vigorish is the fee charged by bookies. It is also known as the juice, take, margin, or vigorish. Bookies don’t usually place bets, so they make their money by charging an additional fee on each bet, win or lose.
The moneyline for a specific game is where you can see the most vig. Let’s take as an example a football game between the Eagles and Bears.
Assume the Eagles are the host team and the favorites to win the game. Eagles-6.5 might be the point spread. This means that the Eagles must win the game by at least seven points to win your wager or “cover” the spread.
The betting line will include the moneyline. The Eagles are the favorites, and they currently sit at -110. This means that if you wager $100, you will only win $90. You also get your original bet back. To win $100, you would need to place $110.
It is easy to see the moneyline as the amount that you would need to place to win $100. The $10 extra is either the vig or the fee to the bookie.
There are many vignettes. There is no standard vig. The most common is -110, which means that there is an 11-10 advantage for the bookmaker. However, this varies depending on the game and the teams.
You could also set the moneyline in the opposite direction. The moneyline could be set at +110 if the bookie wants to encourage more people to bet on the Bears. This means that for every $100 bet, you’d win $110.
For example, if a bookie sets the odds on a football game at -110 for both teams, this means that a bettor would need to wager $110 to win $100 on either side of the bet. If the bookie receives equal amounts of bets on both teams, they would collect $110 from the losing bets and pay out $100 to the winning bets, resulting in a $10 profit.
A Bookie balance the Lines
Bookies make money from the vig, so they want to encourage everyone to place a bet on both sides of a game.
In our example, they want the exact same number of people to place bets on the Bears and Eagles. The bookie does not have to pay any winning bets and can keep his 10% profit.
There are two ways that a bookie may adjust the side of sports gambling: shifting the point spread and shifting the moneyline.
Let’s say that the bookmaker set the point spread at Eagles-6.5 and most people bet on the Eagles. To encourage people to place bets on the Bears, the bookmaker would adjust the spread to Eagles-7.5 or higher.
The bookmaker is trying to get each side’s bets close enough to equal to avoid an unbalanced betting book.
If the bookmaker does not wish to adjust the spread, he can shift the moneyline to -120 and -130. This would mean that the payout for winning an Eagles bet would be lower, which is the same thing as having fewer bets.
Bookmakers desire a balanced book. It is therefore crucial that they establish the correct line or adjust it as new bets are placed. It also helps to consider the volume of bets: the more bets received, the more likely the bookie is to adjust the line correctly.
The line is so crucial that big bookmakers will employ teams of statisticians to help them adjust and create their lines. They can also identify strong or “sharp” gamblers and adjust the lines accordingly.
The majority of neighborhood bookies don’t set their own lines. They rely instead on copy lines or bookmaking services from larger bookmakers.
In some cases, the bookie may also adjust the odds in order to minimize their risk and increase their potential profits. For instance, if the bookie receives a large number of bets on one side of a bet, they may adjust the odds to attract more bets on the other side and balance out the action.
Gamblers: What does the Vig mean?
If you want to win long-term money, it is important that bettors keep in mind the vig. This changes the break-even point of betting.
A -110 Moneyline means that $100 is lost for every bet you lose. However, every win you make will only give you $90 back. If you bet the same amount each day, your wins will not cover your losses.
This means that the break-even point for winning is not 50%. It’s actually higher, around 53% to 54%, depending on the vig. It’s easy to win half of your bets because bookies have betting lines that encourage equal play from both sides.
A sports gambler who loses half of their bets is likely to run out of cash. Gamblers need to win enough money to cover the vig.
It’s indispensable to note that bookies also face risks and can lose money on certain bets, especially if they are unable to balance out the action. However, in general, the bookie is able to make a profit by managing the odds and the flow of money in and out of the betting pool.
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