What is a Bookmaker

June 18, 2011

A bookmaker (also known as a bookie) is a person or organization that accepts bets on a particular outcome of a sports event and pays to the bettors if their prediction turns out to be true. The amount of money that is paid to punters if they are able to predict the actual outcome of an event is determined by odds.

The higher the odds, the more money can potentially be won by the bettor. Unfortunately, outcomes that have high odds are very unlikely to happen; bookies have to somehow make money.

Traditionally bookmakers were located in sports venues such as racecourses, but since the advent of the Internet all major bookmakers are also operating online. The fierce competition in the sports betting market has forced the bookies to attract new customers by offering generous free bets on which matched bettors like to focus.

How Bookmakers Make Money

You probably have understood that bookmakers are somehow able to profit or they would not exist otherwise. But what makes them always win? Let’s have a look at a screenshot of a major bookmaker’s betting offer.

It is tennis, in which only two outcomes are possible – either Melzer or Ljubicic is going to win. According to this bookmaker, they both have equal chances of winning the game, hence the odds (1.83) are equal.

If we had £20 and we were to bet £10 on both players, one of our bets would lose, but the other one would win. If Melzer won, we would profit £8.30 and get our original £10 stake back, but we would lose our bet on Ljubicic. The same would happen if Ljubicic won.

Whatever the outcome, the bookmaker gains £1.70 from our betting activities. Although a single punter would never place bets on both players, there are other gamblers who believe that the other player will win, thus bookmakers are able to profit regardless of the game’s result.

In the example above, bookmakers have estimated that both players have a 50% probability of winning. Assuming that they are not totally wrong, if you place multiple bets on games like this one, you should win half of the times.

On average, you would lose £1.70 in each two £10 bets you place (you win one bet and profit £8.30 but then lose £10 on the other one). It means that you lose 8.5% of your money every time you place a bet. While these numbers may vary slightly in different betting offers or bookmakers, there is one thing that never changes: bookmakers always win.

Even if you think you are an expert in sports, I can assure you that bookmakers are able to create odds so that you lose in the long run. There is only one way you can beat the bookies in the long run – you have to take advantage of their promotions as explained in our matched betting guide.

Leave a Comment

Next post: