How do Bookmakers Make Money?

Sports betting can be a source of income for some punters who develop solid and sophisticated strategies, but for the most part, it can’t sustain a profit-making formula for all bettors. How to bookmakers play a part in this?


This is largely due to the fact that there is always a bookmaker on the other side, who doesn’t do any charity and who will shield as much as possible the business’ profit-making ability. All bookmakers, whose complete information can be found at, are in fact profit-seeking firms, and they are tuned and programmed in such a way that they optimize the chances to maximize their earnings. So, if we accept the premise that bookmakers never lose in the long run, then how can punters also make a profit in the long run?

Well, making money from sports betting is not simple or easy. It needs strategy, discipline and commitment. It also needs a lot of reading and analytical thinking in order to be able to make more accurate predictions. But even if bettors make sure that they have or do all these, they can’t beat the fact that bookmakers will continue to have the odds in their favor and this is because they have a well-developed, inherent functioning system that ensures earnings.

Setting the Right Odds

Bookies offer odds for events and games, which are picked by punters, when bets are placed. These odds are not just numbers. They have an entire system of odds compilation behind them and they are set in such a way that it ensures that the bookmaker will make money. Simply enough, since bookmakers can’t control whether a bet will win or lose because they can’t determine the outcome of the event, they try to maintain control over how much they are able to lose or win for that event. So, they set odds that make money for the bookmakers but which are also appealing to punters.

The Vig, the Juice

Bookmakers don’t just wait for punters to lose their bets in order to make money. They are profit-seeking businesses and so they need to secure their profitability in all transactions and no matter what. Essentially, the odds offered have built-in profit margins, which means that every time a customer places a bet, the bookmakers earn some kind of commission for that bet, regardless whether the bet eventually wins or not.

So, punters pay bookmakers for each and every wager they place and so they generate profits for them. This is known as vigorish or overround and it is commonly referred to as vig or juice.

Odds Compilers

Setting odds is not an automated process, completely backed by software systems and technological applications. Setting odds for bookmakers is a job that is done by the odds compilers and their role is extremely critical for the bookmakers’ profit-making ability.

So, odds compilers gather information, read a lot, make use of statistical analysis, rely on readily available data, use their own subjective interpretations and meanings to make predictions and as such they set the odds that have inherent both the profit-margin for the bookmaker and the attractive possible profit for the bettor.

Balancing the Book

Bookies create balanced books in markets in order to ensure that they will make more or less the same money, no matter what the outcome of the event is. So, what the bookmakers actually aim at, is earning a profit regardless of the outcome and this is achieved by sustaining balanced books. Every possible outcome is given at such odds that in the end, the sportsbook will make a profit. For this reason, balancing is necessary and it is done by constantly changing and adjusting odds, so that the ‘balance’ is maintained every time the dynamics of a game change or the outcome of an event leans towards one or the other way.

Everything that was described here regarding bookmakers’ money-making strategies is far from being as simple as it has been presented. In reality, bookmakers make use of highly sophisticated technology and also they rely on extremely capable, competent and skillful odds compilers in order to be able to make profits and sustain the effectiveness of their business model.