How A Bookie Earns Money from Sports Betting

How A Bookie Earns Money from Sports Betting

Bookmakers, commonly known as bookies, play a central role in the sports betting industry. Their primary goal is to generate profit regardless of the outcome of sporting events. Understanding how bookies make money is crucial for both bettors and those considering entering the bookmaking business. Before we help you learn how to open an online sportsbook, we’ll first walk you through how a bookie earns money from sports betting.

The Vigorish: How A Bookie Earns Money from Sports Betting

How A Bookie Earns Money from Sports BettingThe most fundamental way bookies earn money is through the vigorish, also known as the vig or juice. This is essentially a commission charged on bets. For example, in a typical point spread bet with odds of -110 on both sides, bettors must risk $110 to win $100. The extra $10 is the vig, which the bookie collects regardless of the bet’s outcome.

If equal amounts are wagered on both sides of a bet, you, as the bookie, is guaranteed a profit. For instance, if $1,100 is bet on each team in a game with -110 odds, you collect $2,200. You then pay out $2,100 to the winners (their $1,100 stake plus $1,000 in winnings), keeping $100 as profit.

If you are worried about the betting lines, do not. Look at this pay per head vs white label sportsbook guide so you can understand how these software types can help you. Basically, you can run your own sportsbook with the betting lines included, but you will have to balance your books so that will require some tinkering with the lines.

Balancing the Books

How A Bookie Earns Money from Sports BettingIdeally, bookies aim to have equal action on both sides of a bet, ensuring a profit through the vig alone. However, this perfect balance rarely occurs naturally. Bookies employ several strategies to encourage balanced betting. Here are some of the things you will be doing to manage your lines:

  1. Adjusting the Lines: If too much money is coming in on one side, you may adjust the point spread or odds to make the other side more attractive. This will encourage players to place bets on the other side, thus “balancing the book” by getting as equal as possible from both sides.
  2. Limiting Bet Sizes: On heavily imbalanced games, you might limit the amount that can be wagered on the popular side.
  3. Offering Props and Alternative Lines: By providing a variety of betting options, you can spread out the action and reduce risk on any single outcome. If you are using a really good bookie software, you can even offer your players customizable wagers from a prop bet builder. You can go through this list of the top 10 sportsbook pay per head to see which providers can offer you the best variety.

Risk Management and Other Tools

While the vig provides a basic source of income, successful bookies employ a range of strategies to manage risk and ensure long-term profitability. As the sports betting landscape evolves, you must continually adapt your methods to stay competitive in this industry.

This is why you need to have a good bookie software. The software will have all the tools you will need to manage your online sportsbook. It will also have additional tools to help you earn more. First, they can offer other betting products your players can enjoy- this includes casino gaming, horse racing, live betting, and such. Second, you can make use of tools to help you with managing the risks players can pose in your sportsbook.

This includes ways to find out if your players are using bots to scan odds and place bets. Then you have other tools that will try to identify if your players are sharps. Usually, you can generate reports for each player. If you see a player that has a very, very high win rate, you can minimize your risk of losing by limiting their wagers or removing them from your sportsbook.


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