How Bookmakers Make Money – The Ugly Truth About Sports Betting
Bookmakers are persons or organizations that accept bets on sports events and pay out winnings to bettors whose predictions turn out to be true. The amount of money paid to winning punters is determined by the odds. If the odds are high, a lot of money can be won by a lucky bettor, whereas the winnings are little if the odds are low. Unfortunately, outcomes that have high odds are also very unlikely to happen or bookies would soon be broke.
However, it is not instantly clear how bookies make money. Players usually win in some cases but lose in other, yet bookmakers stranieri italia bookmakers always manage to win. How is that possible? Let’s consider an example from a major online bookmaker’s betting offer. This example is not hypothetical.
According to the bookmaker, a tennis game between Melzer and Ljubicic is equally likely to be won by either of the players; hence the odds for them are also equal. They are 1.83 (in the decimal form) for both Melzer and Ljubicic.
If we had £20 and we were to bet £10 on each of the players, one of our bets would definitely lose, but the other one would win; there are no draws in tennis. If Melzer won, we would profit £8.30 and get our original £10 stake back, but we would lose our bet of £10 on Ljubicic. The bookmaker would gain £1.70 from our betting activities. The same would happen if the other player won, we would lose £1.70 regardless of who wins the game.
A punter would typically place a bet only on one of the players. However, bookmakers do not risk losing anything if one player wins because they have many clients. Consequently, many bets are placed on both players, enabling bookmakers to profit as illustrated by the example above. Bookmakers are able to balance their books by changing the odds to make one selection more or less appealing to bettors, hence controlling how much money is bet on each selection
In this case the bookmaker thinks that both players have a 50% chance of winning, as the odds are equal for both players. If this prediction is accurate (and it probably is), one in two bets placed in such situation should win. On average, the bookie gains £1.70 in each two £10 bets you place (you win one bet and gain £8.30, but then lose £10 on your other bet). In other words, on average you lose 8.5% of your stake every time you place a bet with that bookmaker.
These numbers may vary slightly in different bookmakers, but there is one thing that never changes: bookmakers always win. Even if you are knowledgeable in sports, the bookies probably know even more and are therefore able to calculate odds that make you lose in the long run