If you want to be a successful bookmaker, you need to understand the business first.
Today, we’re going to discuss various topics surrounding this business, including what exactly a bookmaker does, how a bookie makes money and what’s required to stay in business.
What Does a Bookmaker Do?
A bookie facilitates gambling (sports betting and casino). They accept bets and payout winners, while ensuring they get a cut of the turnover by pricing in a commission on the odds.
Have you ever seen an NFL point spread betting market? The goal of a point spread is to make a game a 50/50 proposition based on betting sentiment. However, bookies don’t offer even money odds on these markets. Instead, they add a $.20 commission to the odds.
So, if the Patriots are -6.5 favorites, the true odds should be +100, but a bookie will have the odds at -110 instead. This is how a bookie makes money, which brings us to our next topic.
How a Bookie Makes Money?
Here’s how a bookie makes money:
Let’s say the Patriots -6.5 (-110) are playing the Raiders +6.5 (-110)
- Balance the Action: If you get 50% of bets coming in on the Patriots and 50% of bets coming in on the Raiders, you’re guaranteed a profit. If one hundred people bet $110 on the Patriots and Raiders, you’d have taken in $11,000 on each team. Regardless of what team wins, you’ll only payout $10,000, which means you’ll end up making $1000 guaranteed on this market.
What happens if you don’t get 50/50 action? Well, you have a few options. You could let it ride and take on some risk or you can utilize a layoff book, which your pay per head should provide.
A layoff account is basically a sportsbook for bookies. You can eliminate your risk by laying off some of your action. This is needed for small bookies who don’t have a lot of turnover.
You could also move the odds. Let’s say your clients typically always bet on the Patriots. You could move the line to Patriots -6.5 (-115) vs. Raiders +6.5 (-105) to improve your hold percentage.
Staying in Business as a Bookie
Understanding your business is imperative as a bookie. In order to stay in business you need to focus on certain things, which we’ll briefly discuss in the bullet points below.
- Don’t Gamble: Most importantly, you can’t gamble as a bookie. Taking shots every night is a bad idea. It’s smarter to guarantee a profit by balancing your action, especially when new.
- Track/Analyze Data: The best pay per head services have built-in reporting features that’ll allow you to track everything in real-time, including wagers, credit limits, exposure and more. It’s important to spend time weekly analyzing this data to find out where you’re making/losing money.
- Seasonality: The NFL/CFB seasons are going to be your big money making months, but the bookie business is slower the rest of the year. While many bookies still make a killing on other sports and through the casino, prepare for revenues to dip during the NFL offseason.