How Do Sportsbooks Make Money

A sportsbook is a place for people to gamble on different types of sports matches. These include sports such as American sports like basketball, ice skating, and swimming;

We also know that people who bet on the correct team win most of the time. But we don’t really understand why they’re able to do so. What about bookmakers? How do these bookies earn their living?

For starters, sportsbook operators do not simply take bets for both teams. They are businesses which also make money. And yes, out of all the people who place bets, the bookmakers often come out ahead in any sport or non-sport betting game. Are you surprised? Let us continue discussing.

Betting Odds

At first, betting chances appear complicated and even puzzling but in actuality, they aren’t. Odds are the likelihood that an occurrence will take place. Betting odds inform you about how much cash you’ll make with a specific bet. These odds are provided in various forms. They may be decimals, fractions or American. Let us discuss each:


  • A common way to calculate decimal odds is by multiplying the decimal number by 1.00. For instance, 3.5 would be multiplied by 1.00 to give 3.50.
  • A good way to think about it is that if you place a $1 wager, then you would win $4. If you lose, you’d get back just $1 ($4 – $1).
  • For an American odds betting system, $110 represents a losing wager. It means that if you place a $110 wager, you’ll end up with a loss of $110.


You may wonder why some websites present their odds differently than others. And you may wonder where the numbers for each type of wager come from. But before we get into that, let’s take a look at how bets are made.

Betting Line

These chances are carefully made by the in-house bookmakers who work for online gambling sites. These people are the brightest brains in the bookmaking industry and they use public opinion and key stats to come up with the wagering lines. Bookies first set an overnight line which is often referred to as the opening prices. They believe these numbers will attract the same number of bets from either side.

The first line is usually given to a select group of bettors, professionals. Once the bookmaker has an understanding of what these few professional gamblers believe, $1 minimum deposit casino canada they will adjust the line based on that, plus considering other factors like team strength, injuries, and statistics. Then the line goes live.

The line released to bettors doesn’t remain static. It either goes up or down depending on whether bets come from both or either side. Online sportsbooks want an even balance between bets on each team because that’s how they earn their profits.

The Vig

Betting sites take advantage of the popularity of sports betting by offering an additional incentive to bettors who place wagers. These incentives include bonuses, discounts, and promotions. In addition, they may offer a percentage of each winning bet placed. A bonus can range anywhere from $5 to hundreds of dollars. Discounts can vary depending upon how much one spends per month. Promotions can offer a discount if one places multiple wagers within a short period of time.

Betting lines usually offer the two teams’ point spreads. For example, the line might say “Lakers +3” which means that if you want to win $100, you need to wager $300.

Let’s say a sportsbook takes two $110,000 wagers on the Los Angeles Lakers vs the Boston Celtics. In each case, the sportsbook will lose $110,000 ($55,000 per loss), so they’ll end up losing a total of $220,000. They’ll then take both losses off their books, leaving them with no gain or loss. So, they’ll end up paying out $0.

Most people would agree that the best football teams are those that win games. However, what if we were to say that the best football teams were those that had the best odds? Well, that would make sense because the sportsbooks take a cut of every bet placed. So, if a bookmaker offered a line of 1/2 (50%) they would only get half of each bet placed. That means that the bookie would not make any profit unless the changed the nature of gambling winning side won the match. Therefore, the bookies would always offer the worst possible odds for the losing side. This is why the best teams are often listed as favorites. They are often given the lowest odds so that the bookmakers do not lose out on potential profits.

Creating a Balance

Now the example we provided above is the best case scenario which the bookmakers would love to have: an equal amount of bets placed on both sides. However this doesn’t always happen and in reality it rarely occurs. This is the reason behind the movement of lines from one direction to another. Bookies know what’s happening and adjust accordingly. They make changes to their odds so that they can attract new customers and retain old ones. In the end, it’s a good thing for everyone involved.

Going back to our previous example, the bookmaker made $10,000 off of a $220,000 bet. We can assume that gambling is a billion dollar business, so imagine just how much profit these online bookmakers make. And it‘s not just one, or two, or three or four books they offer. That doesn’ t even take into account how many matches occur every day. The vig isn‘t a large financial sum when you consider it. However, the sheer volume of bets being placed means gambling is one of the biggest industries in the world.