Running A Sportsbook
- Running A Sportsbook
- Running A Sportsbook Free
- Is Sportsbook Legal
- Penalty For Running A Sportsbook
- Running A Sportsbook Game
A sportsbook is the same thing as a “bookmaker” or “bookie.” It’s a company or individual who accepts bets from individual sports bettors. Most of these kinds of bets are on whether a team (or individual) is going to win a specific sporting event.
Successful Bookie Tips – How to Run a Sportsbook. In our last tutorial, we talked about how to attract new players to your sportsbook. This time we will share some successful bookie tips. Our guide will show you the requirements to achieve success in the sports betting industry. The futures market in sports betting is a huge part of the industry. The possible bet types range from championship winners to divisional winners, and even MVP candidates. For instance, just days after Super Bowl LV, DraftKings Sportsbooks started giving odds on next year’s Super Bowl champion.
Books accept bets on either side of a sporting event. They’re able to afford this because of the difference between what a bettor has to wager and what a bettor wins. Most bets at most books require a bettor to wager $110 to win $100, although some require $120 to win $100. (And some discount books only require $105 to win $100.)
Those numbers, by the way, are ratios. You don’t have to wager $110. You could bet $55 or $11—you’d just see winnings of $50 or $10 for those bets. It’s the ratio that’s important, rather than the specific amount.
Bookmaking in the United States is tightly regulated by the government. Most states don’t have legal sports betting, although that’s likely to change based on https://www.gamblingsites.org/blog/delaware-becomes-first-state-to-usher-legalized-sports-betting/recent Supreme Court rulings. But the Federal Wire Act outlaws using any kind of wired device (like a telephone or an internet connection) to place sports bets, even with legal books.
Plenty of online companies are willing to accept sports bets from United States customers, though. These books are located offshore and contend that they’re doing business in their country, where such activity is legal and regulated.
This post takes a closer look at the sportsbook business and how it makes a profit from its customers.
What Kinds of Bets Do Sportsbooks Handle?
Most sportsbooks accept wagers on most major sporting events, especially college and professional events. Some online bookmakers expand the kinds of bets they offer to other, non-sporting events, like the results of political elections and/or the Oscars. The action that these books accept varies from book to book.
The most popular sports bets that bookmakers handle include:
- Baseball
- Basketball
- Boxing
- Football
- Golf
- MMA
- Racing
- Tennis
- Soccer
Of course, in the United States, it’s hard to imagine two sports getting more action than football and basketball. But in other countries, what we call soccer is called football, and it’s the most popular sport to bet on.
Also, when I use the term “racing,” I mean both horse races and car races. NASCAR betting is hugely popular in the United States.
But you’re not limited to betting on just those sports. Depending on which book you’re doing business with, you can also bet on smaller and more unusual events, including billiards, bowling, and darts.
No matter what sport you’re placing a bet on, the sportsbook has figured out a way to make it profitable for them and unprofitable for you—unless you’re exceptional.
This next section covers how they do that:
How Sportsbooks Make Their Money
Bookmakers are like any other business. They exist to generate a profit.
But you can’t make money if you’re willing to take bets on both sides of the game, can you?
You’d think, if you didn’t know better, that books make their money from being on the right side of the games. That’s not the case.
The profit comes from what the bookmaker asks you to wager when you place your bet.
Most bookmakers ask you to bet $110 to win $100. (The amounts can change, but the ratio is the same. For example, you could bet $55 to win $50, or $22 to win $20, or $11 to win $10.)
If they get an equal amount of money on either side of the contest, they’re guaranteed a profit.
Here’s how that math works:
100 people bet on a football game, and 50 of them take the home team. The other 50 take the away team. Assume that the average bet size for each of them on each side is $110.
The bookmaker collects $110 X 100 people, or $11,000.
The winners get their initial $110 back, so 50 X $110 is $5500.
The winners also win $100 each. That’s another $5000.
That’s $10,500 in payouts, but since they collected $11,000, they make $500 profit—no matter which team loses.
That extra $10 you’re risking on the bet?
That’s called “the vig” or “the juice.”
That’s what gives the book its positive expectation. It’s comparable to the rake in poker, or the house edge on a casino game.
Bookmakers are good at handicapping teams in such a way that a bet on either side has a 50% chance to win. They’re also good at handicapping teams in such a way that both sides see roughly the same amount of action.
Of course, not all bets use that $110 to win $100 ratio. In some books, the ratio is even worse for the player–$120 to win $100. Others discount the juice and only ask you to bet $105 to win $100.
And in some contests, the book doesn’t handicap the teams at all. They just create a money line, where a bet on the favorite wins much less money, while a bet on the underdog wins much more money. When they do this, they set the payout odds in such a way that they’re still going to make a profit regardless of which side wins.
This business model is ingenious, and it’s also hugely profitable. Large bookmakers deal with hundreds of thousands of dollars per game. In the case of NFL football, that’s 15 or 16 games per week.
That $500 profit starts to add up fast.
Of course, bookmakers need to be well capitalized. In the short term, anything can happen. They’re not guaranteed an equal amount of action on each side. In those cases, they might need funds to compensate.
Over time, the law of large numbers sees to it that the book stays profitable, though.
Are Sportsbooks Legal?
The legality of sportsbooks varies based on the jurisdiction that you’re talking about. In the United States, for example, sportsbooks are illegal almost everywhere in the country. A recent Supreme Court decision is catalyzing change in that area.
The underground sports betting industry, though, is tremendous. If you’ve spent much time at a local bar, you’ve probably met multiple customers of local bookies. They have a reputation for being part of organized crime, and maybe some of them are, but some of them are just guys who figured out the math behind the business and started taking bets.
Many local bookies use offshore sportsbooks to even out the action on either side of the betting, in order to reduce their risk when the action gets lopsided.
The Wire Act makes it illegal to take sports bets over the phone or the internet, but it’s a rare local bookie that gets prosecuted for this. I’ve never seen any reports of a bookie’s customer getting arrested or prosecuted for placing a bet.
Of course, in other, more enlightened countries, bookmaking is completely legal and regulated. The UK is an example of a country with this kind of attitude.
The advantages of legal and regulated bookmaking are obvious. For one thing, legal, regulated businesses pay taxes. For another, consumer protections exist for customers of legal, regulated businesses.
The amount of tax money the United States is leaving on the table because of the current legal status of sports betting is staggering. In fact, enormous amounts of money fly offshore every day because of customers using online sportsbooks. That money could be kept in the United States economy if sports betting were legal and regulated.
What’s the Difference between a Traditional Bookmaking Operation and a “Betting Exchange?”
A betting exchange is similar to a bookmaker, but the differences are significant enough that they have another name and business model. It’s more of a marketplace model, where customers can buy and sell either side of the action.
This is more or less what a traditional bookmaker does, but with a betting exchange, the customers set the odds themselves. The betting exchange doesn’t care about how good or bad the bets are, because they charge a small commission to the winning side of each bet.
The biggest example of a betting exchange is Betfair. You can both back and lay bets there. With a traditional bookmaker, you can only back a bet.
Here’s what that means:
When you bet with a bookmaker, you bet that something will happen. The bookmaker wins if it doesn’t happen. That’s backing a bet.
With a betting exchange, you can play the part of the bookmaker and bet that something won’t happen. That’s laying a bet.
All you have to do is find another customer who’s willing to take the other side of the bet at the odds you like.
This creates opportunities for trading and arbitrage that would be almost impossible when dealing with bookmakers. Smart bettors can find plenty of opportunities to take advantage of inequities in the marketplace of a betting exchange and guarantee themselves a profit.
Some traditional sportsbooks criticize betting exchanges for stimulating corruption in sports. It’s easier to rig an event to not happen than it is to rig an event to happen. And traditional books like Ladbrokes and William Hill suggest that giving individuals that opportunity to profit will result in more events being fixed.
How Betting Lines Work
The most common types of sports bets are:
- Spread bets
- Moneyline bets
- Totals
- Prop bets
Spread bets are bets on a team to win by a certain number of points, or for a team to cover a certain number of points if they lose. The books use handicappers to predict the outcomes of the games. Based on this handicapping, they set a point spread.
A favorite must win by a minimum number of points for a bet to win. An underdog can win even if the team loses. All they must do is cover the point spread.
The spread is set up to do 2 things:
- Create a roughly 50/50 chance of winning
- To stimulate roughly the same amount of action on either side of the bet
A moneyline bet, on the other hand, doesn’t take a point spread into account. Instead, the amount you win is adjusted by the likelihood that a team will win or lose. If you bet on an underdog, you’ll win more money if they win. (They’re expected to lose.) If you bet on a favorite, you’ll win less money than you’ve risked. (They’re expected to win.)
The amounts are determined by how big a disparity there is between the teams. You might bet $100 on a favorite but only win $20 if they win the game. Or you might bet $100 on an underdog and win $150 if they win the game.
Totals are also called “over/under” bets. These bets pay off if the total scores for the 2 teams are over or under the predicted total. The handicapper sets these totals in the same way they calculate the point spread. They want to create a 50/50 chance of winning, but more importantly, they want to get equal amounts of action on both sides of the contest.
Proposition bets are bets you can make on any kind of random event during a game. This might be something as random as who’ll win the coin toss in a football game. Or it might have some element of skill, like a prop bet on who’s going to score the first touchdown in a game.
All of these available bets are called “betting lines.” They’re created by the mathematicians and statisticians working for the books using software and experience. This is the most important job at a sportsbook, and good handicappers can make or break a business.
Different sportsbooks have different handicappers, so it should be no surprise that the betting lines at one book can differ from the betting lines at another book. Shopping lines for the best opportunities is one way smart sports bettors profit from these companies.
How Sportsbooks Handle Bets on Different Sports
The kinds of bets available usually vary from sport to sport. For example, in contests like golf or auto racing, you bet on who’s going to win the race or the golf tournament. The payout is based on how likely it is for your pick to win.
These kinds of bets are straightforward enough. Each golf tournament participant or each driver has a payoff associated with him or her. For example, you might win 4 to 1 if Jeff Gordon wins a race. Or you might win 5 to 1 if Tiger Woods wins the golf tournament.
In addition to bets on the individuals participating, you can also place bets on “the field.” This is a bet that someone other than the individuals listed wins. This could be any number of people.
Bets on boxing and the MMA are similar, but of course, there’s only a single winner in any fight. These are moneyline bets. You pick a winner, and you get paid off based on the likelihood that you’re right.
Bets on games like baseball and soccer usually use a moneyline approach. You bet a certain amount of money, and the amount you can win depends on how well the team is favored (or how badly the oddsmakers think the team will lose.)
Sometimes baseball includes a run line, which is similar to a point spread, but the run line is always 1.5. It doesn’t change based on the relative strength of the teams. Further changes based on the strength of the teams are calculated into the moneyline.
The most popular way to bet on football, though, is spread betting. The point spread in football is so popular that major publications report on it, even though betting on NFL game is theoretically illegal in most parts of the United States.
And, of course, all these bets are set up so that the bookmaker can lay bets from both sides and guarantee a profit. Sometimes this is as simple as requiring you to wager $110 to win $100, but with moneyline bets, the vig is “baked into” the payout odds.
What Do Sportsbooks Do about “Sharps?”
A “sharp” is a skilled bettor—an “advantage gambler.” By shopping lines and doing a better job of handicapping games than the oddsmakers at the books, a sharp bettor makes a consistent profit by identifying and taking advantage of opportunities in the marketplace.
As with any advantage gambler, books don’t like dealing with them. You’ve probably seen movies or TV shows where casinos “backed off” card counters by telling them they were too skilled to be playing blackjack at their casino. Books sometimes do something similar.
When a sportsbook realizes they’re dealing with a sharp bettor, they’ll sometimes refuse to accept more action from that bettor. They might take a softer approach and limit the amount of action they’ll accept from such a bettor.
This has become such a problem for some professional sports bettors that they’re forced to employ multiple runners to place bets on their behalf to stay in action.
Even though books are supposed to be able to make a profit regardless of who bets on which side, large bets—especially at the last minute—can “unbalance” the action at the book. This can create negative expectation situations for the books.
And no gambling company wants to accept any kind of negative expectation situation. That’s not how they stay in business at all.
Conclusion
Sportsbooks, bookmakers, or bookies… they’re all the same thing. These companies provide a much-desired service for people who like to bet on the outcome of sporting events. In some respects, a sportsbook is much like a marketplace.
Newer sportsbook models (“betting exchanges”) are even more like marketplaces. You could almost think of them as being the equivalent of Wall Street, only for sporting events instead of companies.
If you take nothing else away from this post, know this:
Books make money by instituting small price inequities into the marketplace. One of the more obvious ways of doing this is asking you to risk $110 to win $100 on a 50/50 wager. To profit consistently at sports betting, you must win more than 53% of the time.
The legality of bookmaking in the United States is changing rapidly. At one time, the only legal place to bet on sports in the USA was in Las Vegas. But Delaware just legalized sports betting, and more states are sure to follow.
But for a lot of Americans, offshore books that operate online are the most convenient option to bet on sports. Neighborhood bookies probably aren’t going out of business anytime soon, either.
Please enable JavaScript to view the comments powered by Disqus.The two most important activities that you should do when learning on how to become a bookie are learning how to acquire players and signing up with a pay per head service like Realbookies.com to take your players’ bets automatically with our betting software.
If you are in college and thinking about becoming a bookie, click here to see how a student took bets to pay off his college debts
The bottom line in bookmaking business is:
The more action you write, the more money you make. You will always want to add what you believe are solid players, not only to expand your business, but also to replace those customers who have proven to be bad debt or simply have been worn down by the house advantage.
Understanding that the customer who wagers only $100 a game will lose $3,000 to $4,000 over the course of any given season should give you plenty of incentive to hit the bricks. If you use your time wisely, reaching a customer base of 200 or so (a little better than average) should be no problem.
Getting new players is not as simple as advertising in the newspaper or sticking fliers on the windshields of cars when becoming a bookie. Nor can you just go out to the backyard, shake the customer tree, and watch them start falling to the ground.
Steps to become a bookie:
- Learn about the business from blogs and experienced people
- Find players
- Partner with another bookie so that you both win
- Get a great Pay Per Head Bookie Software
- Start running and managing your business
What you have on your side, however, is word of mouth.
“I won $3,000 from my bookie this weekend, and he paid me in full at 10:00 A.M. Tuesday.” If enough co-workers and room mates and drinking buddies hear that, they are sure to say, “Hey, you think you could get me on with your bookie?”
The best thing you can do to expand your client list is continue to treat the customers you already have with respect, courtesy, and professionalism-and to always pay in full, on time, and in cash.
People like to talk, especially when they just spent their lunch break picking up a sack of money, and if all the talk about you is similar to that above, you will have no problems adding new players.
What if you are starting out with no customers? There are still ways to maximize returns on your efforts. The first step to becoming a bookie is to understand the basic truth that gamblers know other gamblers.
Think back to the first time you talked to a bookmaker. Didn’t you know somebody who was gambling and he set you up’? Or were you in the employee break room when one of your co-workers had a sports page out and was checking the lines? Nothing has changed since that time, except that gambling has become more popular than ever.
Should you open shop?
If you are considering opening your own sportsbook operation, odds are you know people who gamble on sports. Some of them are probably looking for a new outlet to wager. I always told potential customers who already had a bookie that if they would try me just one weekend, they would never go back to their previous bookie, and in the 8 1/2 years I was in the business, none ever did.
If you follow the guidelines on this page and conduct your business based on the information here, you will create many ex-customers for other bookies around your city.
You can start a football season with as few as 10 customers, and by the time bowl season has arrived, word of mouth recommendation should swell your pay sheet to 50 or 60.
At that level, even if the customers are small time, you should be employing an office clerk and a fax clerk while still leaving yourself a profit of $100,000 or so for six months of semi-work. Another way to increase customers as a bookie is to spend your leisure time where gamblers spend their leisure time.
But… Is It legal?
Here is a list for places where land-based Sportsbooks are legal. Also, remember that some states have started to loosen up regulations as well.
- Aruba
- Australia
- Bahamas
- Belgium
- Canada
- China
- Costa Rica
- Dominican Republic
- Ecuador
- France
- Guatemala
- Honduras
- Hong Kong
- Indonesia
- Ireland
- Italy
- Japan
- Macau
- Malaysia
- Mexico
- Netherlands
- Nicaragua
- Panama
- Portugal
- Spain
- South Korea
- Switzerland
- Taiwan
- Thailand
- US
- Turkey
- UK
- United Arab Emirates
Basic truth number two:
Golfers love to gamble.
Whether it is a $1-a-hole or $500-for-closest-to-the-pin wager, money changes hands when buddies get together on the links. Visit a golf warehouse or discount store, and the clerk there should be able to provide you with the names of several local private clubs you can join.
Many have stipulations that you have to be sponsored by a current member of the club, but some don’t. Find one where the membership fee is only $1,000 or so, plus monthly dues, and join. Besides improving your golf game (never a bad thing), being a member of the club will allow you to meet the other members of the club. Whether it is on the fairway or in the clubhouse, most of these men will enjoy a friendly wager from time to time.
You should be discreet when divulging how you make your living, but a cell phone call from a cart while the other three are deciding which club to use will start the conversation. Being proficient at spades, hearts, gin, etc., will also provide you the chance to meet other gamblers at the club.
Many older gentlemen go to the club every day to do nothing other than sit in the pro shop or locker room playing poker for eight or ten hours. Be friendly, be discreet, and, before long, you will be taking action.
The same basic truth (loving to gamble) applies to most guys who play tennis, but many actually participate in that sport for health benefits, and that is not our focus here.
BARS
Looking for more customers? Select a few bars in different parts of your city and become a regular. This does not mean you also become an alcoholic, as ginger ale or cranberry juice is usually what I order. (Trust me when I say that getting a DUI is not a fun thing, and it is even less so when the arresting officer sees that you have a hundred copies of the official betting schedule in your backseat. That’s what law enforcement refers to as a “clue.” But back to bars.)
When we say select a few “bars,” I am not talking about a T.G.I. Fridays or Chilis. I am talking about real bars. You know, the kind where when you walk in you can’t see anything for a minute or two until your eyes adjust. Real bars don’t have 143 televisions. They usually have one above the bar and one in the back room where the card tables are.
Find a few establishments like this and you have also just found a couple more customers. Go in, sit at the bar, and begin watching television. When you curse a basketball player for missing a free throw when his team is up by 17, the gamblers in the joint will know why you are upset. Most likely, they will be the ones to bring up sports wagering. “Who ya’ got?” is a common opener. When you reply, “I’ve got something on every team,” the conversation is started, and pretty soon you have another reason to visit the bar.
Partnering With Another Bookie
Probably the best way to get a lot of customers on your ledger in one motion is an arrangement where another bookie becomes a “sub-book” to you. It works like this:
Almost without exception, small to mid-size bookies will shut down after the NCAA basketball tournament is over and not reopen until football season starts in August. You should have no problem finding a player who, toward the end of basketball season, is looking for a new place to play so that he can bet on baseball.
The truly amateur bookie will think only of adding one new customer and, while taking on the new guy, will promise not to tell his regular bookie that he has gone somewhere else. What you should be doing in situations like this is not only have him tell his regular bookie about you, but ask that he put you in touch with his regular bookie.
At this point, you can present a no-risk offer to the bookie who is planning to stop taking action for a while. What you propose is that he tell all his current customers that he will be shutting down for baseball, but that if any of them want to get action on the games, he can recommend someone who is staying open.
Explain to the bookie that you will keep a separate record of whatever money, as a group, his customers wind tip collecting as a net winner or paying as a net loser. If they finish the season on the plus side (they won’t), you will pay out every penny. If they finish the season on the negative side (they will), you and he will split the profits 50-50.
All he has to do is meet with you each Tuesday morning to get the figures and then go pay or collect from the guys he put on. It will cost him nothing. He will have to do almost no work. He will make money.
Make sure the bookie realizes that in no way are you trying to snake his customers, just make money for both of you. He is planning on being closed anyway and, if he does it his way, he makes zero dollars for the summer.
Do it your way and he makes many dollars for the summer. Abiding by that agreement will, at the very least, be a money maker for a few months for you and the other bookie (now a “sub-book” to you). What normally happens is the bookie (a lazy creature by nature) will realize that he made a bucket of money for working one day a week, and when August creeps over the hill, will suggest that you two continue the arrangement.
Running A Sportsbook
Do this once a year and you will be extremely wealthy. You know the best part of this deal? With the extra money you get from this sub-book’s customers, you will be able to more than pay for another clerk, and now you won’t be working every day, either.
Running A Sportsbook Free
Becoming a member of a VFW or Eagle’s lodge or similar organization is another fantastic way to grow your bookie business. I had been a bookie for seven years when I joined one just north of Atlanta, and within two days, they had taught me new ways to gamble on sports. The bartender was the guy at the lodge who organized all the betting there, and he was confused by it, more than anything else.
He was happy when someone came along offering to help. “Helping” quickly turned into I had 53 new customers as a result of paying my $200 initiation fee. Besides being served semi-warm beer and having to listen to much more Hank Jr. than I ever knew existed, there was little downside to it.
Finally, I have acquired customers in a variety of other ways. Bookies have died, gone semi-legit, gotten married, gotten scared, or gone to jail (nongambling-related charge).
Hell, one buddy of mine decided that having to work three hours a day was just too much for him. For whatever the reason, if you can beat the bushes and open with even 10 or 12 guys, you will have 50 before you know it.
Is Sportsbook Legal
At that point, you are making a decent enough chunk of change to hire a clerk to work with your pay per head software service. You can then justify making him work all the shifts by himself, as you are out “recruiting new customers”.
Once you have built up a list, the next move is to acquire the correct software to automate taking the bets and the other every stuff that comes with being a bookie. For that please read on the best sportsbook software to use and the advantages of using a PPH service like RealBookies
If you are a beginer, right now you are wondering where to start acquiring the knowledge that will allow you to thrive in the Bookie Business, start with the Bookmaking Essentials course at Bookie Academy.
Penalty For Running A Sportsbook
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