The sports betting industry can seem pretty complicated, but at the basic level, it’s relatively easy to understand how does betting actually work. Any bet consists of three parts:
- Someone making a bet
- Someone else accepting that bet
- Something to bet about
Growing up, we would make bets with our friends all the time. Both sides were so sure they were right that they were willing to gamble on some prized possession, like money. As I got older, I saw on TV that there were shady characters called bookies that would take bets from sports fans that weren’t the most upstanding citizens. People were laying bets on all kinds of sports.
I’d see parents getting into betting pools when I got a little older. They would place bets on a single sports game or the entire season. It was more like a lottery because only one person would win, but it introduced me to the world of sports betting.
What Part Do Bookies Play?
This is where my understanding of betting stood until I was old enough to go to sports bars and see people placing bets. I figured bookies were like a store. They took your wager, and if you won, they paid you your winnings. I assumed they were shady because it was illegal, which, of course, made it more interesting.
I didn’t understand why they were needed or how they made their money at the time, but I’ve since learned a thing or two. So let’s break it down some more. In all bets, someone wins, and someone loses. That’s the game. That’s where the excitement comes in. The bookie effectively makes sure that the gambler has someone to bet against. You don’t have to find that person. That’s their job. And for taking care of that for you, they take a small fee – usually 10%. They actually do a lot more than that, like setting odds and point spreads and moving the lines, but let’s keep it simple for now.
How Does Betting in Casinos Work
A bookmaker does the same things as the big sportsbooks. They are a betting office that accepts bets. The difference between them is volume. Each one accepts betting, but books like the ones in Las Vegas do a lot of business and make a lot of cash. Until recently, they were brick-and-mortar establishments. You had to go in person, and they weren’t close. Local bookmakers were much more convenient. Now, sportsbooks and bookies are both online, which facilitates gambling even more. It also means that offshore bookmakers are increasing, and local bookies are no longer necessary.
When I finally went to Las Vegas, I entered my first casino. There were lots of people betting on sporting events. The casinos pay out the winnings minus their transaction fee, which is called, the Juice or the Vig. They create the lines or the odds at a precise point to have the same amount of money placed on either side of the bet. This way, they’re not taking a risk.
For example, if there’s a total of $5,000 bet on the Los Angeles Rams to win the next game and $5,000 in total bets for the Rams to lose, then the sportsbook isn’t taking any chances. Whether the Rams are the victors or not, the sportsbook is taking $5,000 from the losing bet and paying out $5,000 to the winning side, minus their juice (usually 10%). The game’s outcome doesn’t matter to the bookmaker when they have the same amount of money on both sides. When they’re able to do this, they are guaranteed profit. They make their money from the transaction fees. They take the money collected and use it to pay the winners (minus the money the bookie takes for his services).
The Main Stress of a Bookie
This is how the legalized sports gambling world works. Wagering takes place in almost all sports events. If there was only $3,000 bet on the Rams to win but still $5,000 bet on them to lose, now the bookmaker is at risk of losing money. The sportsbook or bookmaker would move the betting line to mitigate that risk. They could say that the Rams have to lose by at least 7 points for it to be considered a loss. This way, more gamblers will bet on them to win, adding to the $3,000.
In the background, they would have odds compilers who would establish the lines. They’re trying to calculate odds to get that perfect number that will cause half the wagers to go on one side and half on the other. Not only is that difficult to do, but nationwide, the amount of cash placed on either side of the bet can change with each bookie because their players might have local favorites.
It gets even more brutal to balance when the bets get more complicated, like parlays, props, and futures, and you can forget about getting an equal amount on both sides because there are a lot more than two teams. Just think about all the teams in the NFL vying to win the Super Bowl.
Gamblers don’t have to worry about this; they just need to know the odds to decide which side to bet on. But if the bettors understand how gambling and bookmakers work, they can improve their winning chances and maybe have some long term profit. PayPerHead software makes it a lot easier to be an online bookie. We take care of setting odds for all the sporting events and provide injury reports so you can give betting tips to your bettors.
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