How Does the Bookmaker Receive Income? View from Inside

Each bettor, who deals with bets for at least a year, tries during this time a considerable number of ways to beat the bookmaker.  In the course are popular betting strategies that are modified in different directions, but usually any new initiative of an inexperienced player comes to a sad ending.

In order to have income from bets, you need not only to be able to analyze sports games and calculate the probability of events, but also understand how bookmakers work.  Let’s try to slightly open the curtain in the world of bookmaking business.

Bookmakers did not appear on level ground.  Even thousands of years before the opening of the first bookmaker office, the rudiments of modern bookmaking manifested themselves in one form or another in completely different spheres of activity.  For example, an exchange broker performs a similar bookmaker role. The broker accepts money from traders, and after changing positions on the exchange, pays the winners money.  In exchange, for rendering such services, the broker receives a part of the client’s profit, which is also called the margin.

Forming coefficients

Major bookmakers have an analytical department in their staff that is responsible for drawing up the line.  Employees of offices evaluate the probabilities of events and establish coefficients on them.  This is a very complicated kind of activity, since it is necessary to evaluate the probability of an event immediately according to several tens of criteria (motivation, statistical probability, form, injuries, judges, support influence of spectators, weather conditions, etc. ).  In addition, the bookmaker should also evaluate the public opinion, so that the coefficient is not in great disproportion to him.

Let’s look at an example of how coefficients reflect the probability of an event.  Take the game of the Premier League between Everton and Arsenal and odds for this match from the office 1xStavka.  To find out the probability of any outcome, you need to divide 100 into a betting odds odds.  We got the following picture:

• Everton’s win: 100 / 4. 4 = 22. 73 (probability in percent)
• Draw: 100 / 3. 82 = 26. 18
• Arsenal win: 100 / 1. 91 = 52. 35

If we combine the probabilities, we will get 101. 26%, although in fact, their sum should be 100%.  This means that the bookmaker has put a margin in the coefficients, at a bet of 1. 26%.  Roughly speaking, the profit of the office will be 1. 26% of the amount of all bets on these outcomes.  In one separate game this rule may not work, but after a long distance everything will fall into place.

Margin in the game can be 1% or 20%, depending on the level of the tournament, the importance of the match, the type of market and the amount of bets.  The higher the bookmaker’s margin, the lower your chances of profitable bets in the long run.

The dynamics of the coefficients

In order to succeed, bettors must learn to correctly assess the probability of a market passage.  Bookmakers can give correct coefficients only to the original line, and then they can change the coefficients so that at any volume of the players’ bets get a profit.

The bookmaker closely monitors the flow of funds.  If the players’ money is distributed to the markets in approximately the same way as the bookmaker estimated their likelihood, the line will stand almost in place.  But there are situations when an immeasurably greater flow of money is directed to the market, in comparison with the probability of passage of this market.  In this case, the coefficients will be changed almost instantly.

For example, if in our example 70% of money will be delivered to Arsenal instead of 50-55%, then the bookmaker will automatically lower the coefficient for the success of the London club and increase the odds for a draw and Everton’s victory.  This is the incentive for players to bet on the opposite market.  That is why the coefficients are constantly in motion, as in the chart, which you see on the screenshot.

If even such actions do not lead to the desired result, then the bookmaker simply strongly limits the betting limit.  Even if he bears losses, they are not so significant.

Conclusion

As you can see, the bookmaker does not work by the principle of aligning perfectly correct coefficients.  The main thing for him to understand how the public opinion will be formed and where the players’ bets will be distributed.  This important aspect allows more experienced players to successfully play on drawdowns of the line caused by a large number of bets on overvalued markets.