How Sportsbooks Make Money

Many of those new to sports betting or gambling, in general, may look at sports betting from afar and consider it something that can be beaten with a bit of sports knowledge. It’s obviously not that simple, but when compared other forms of gaming, such as casino gambling, sports betting is almost always the best option for +EV betting opportunities.

One of the reasons sports betting seems so simple to a square bettor or someone who is mostly uninformed when it comes to gambling probabilities is that they equate betting the point spread to picking outright winners. They also lack understanding of vigorish.

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Balanced Book – Sportsbooks Money Making Strategy

In an ideal world, sportsbooks would like to have balanced action on both sides of each market. If they have an equal amount of wagering on both sides, they can collect the vig with no risk. Let’s look at an example:

Let’s say a sportsbook takes in $55,000 in wagers on the Steelers -7 (-110). They also take in exactly $55,000 on the Browns at +7 (-110). The Browns and the Steelers are playing in Pittsburgh on an NFL Sunday.

nfl bettingIn total, this gives the sportsbooks a handle of $110,000 on this particular market. The sportsbook’s handle is the amount of wagers they take in on both sides of a betting market. The game itself and the sportsbook have three possible outcomes when it comes to payouts.

  1. The Steelers win the game and cover the -7. The sportsbook pays out $55,000 to customers who took the Steelers.
  2. The Browns win the game or cover +7. The sportsbook pays out $55,000 to customers who took the Browns.
  3. The game ends with the Steelers winning the game by exactly 7 points. In this case, the game is a push and all wagers, including juice would be returned to customers.

Let’s forget that the game may end in a push and look at what the sportsbook stands to make if the game ends with the Steelers or Browns covering. Regardless of which team covers, the sportsbook owes $55,000 to the customers that backed the winner.

How Sportsbooks Make Money – Explained

However, either way, the sportsbook is profiting $5,000, regardless of which side wins the game. Since they took in a total of $110,000 and they are paying out $55,000 to Steelers’ backers and will keep $50,000 in profits from customers betting on the Browns.

Of course, it doesn’t always work out that way. In many markets, including major ones, such as NFL football sides and totals, it’s impossible for the bookmakers to achieve balanced betting on both sides.

Sports Betting Market – How Betting Sites Make Money

In today’s world of sophisticated bookmakers and sharp gamblers, the sharps always seem to be ahead. As we went over in our article on “fading the public” as a betting strategy, the sportsbooks may want to alter the odds to cater to public betting opinions, (which they sometimes do) but their first priority is stopping sharp bettors from having a field day. The reason why betting limits are in place is that without them, the sharp bettors would run the sportsbooks and not the oddsmakers. Once the odds are released, it’s the sharp gamblers betting big money who are shaping and moving the odds.

While adjusting the odds as best as possible to achieve a 50% split in betting action might sound ideal for the sportsbooks – this is not the reality. The sharp bettors wager more money than the general public, and their opinion means a lot more too. A bookmaker can’t usually justify not moving a line if the public is pounding one side, but the sharps are all over the other. This is known as reverse line movement.

Many recreational sports bettors think the sportsbooks don’t want them to win. They’re right, of course, but in reality, they’re not too worried about them. Their goal is to limit the amount sharps can win off of them by producing accurate lines. The squares will bet into these odds and lose, just like they always do.

Professional Versus Recreational Sportsbook

Pinnacle Sports sportsbookPinnacle Sports is the largest bookmaker in the world. They’re the epitome of professional sportsbook, and they have the largest betting limits in the world. They accept up to $1 million dollar bets on some markets. They almost never ban or limit a player.

How is that they case? Pinnacle is a reduced juice sportsbook but is still the easily the sharpest bookmaker online. They don’t ban players for winning too much. In fact, the sharps betting at Pinnacle help them make their odds elite.

How can they afford to let sharps win? Well, it’s about volume. Pinnacle’s reduced juice and excellent reputation make it extremely popular. They do an unbelievable amount of volume and also have their odds shaped by some of the world’s best sports bettors. The rest of the betting markets reacts to the line moves of Pinnacle and other top sportsbooks. Pinnacle is available for Americans. The closest sportsbook to Pinnacle in American online betting markets is Bookmaker.euBookmaker isn’t on Pinnacle’s level, but they still take the largest bets in US betting markets. Most other sportsbooks are a tier below that, and then many shops that just want to target square bettors.

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Sportsbook Make Money By Controlling The Odds

Ultimately, the sharpest bettors in the world control the odds, and the top bookmakers are happy they are doing so. The less than sharp or downright poor bookmakers get beaten by sharps. It’s the betting “cycle of life.” One of the biggest reasons it can be harder make money at sports betting these days is that there are so many recreational sportsbooks that will limit or ban players who take them for too much money or because they’re making sharp bets.

It’s also a major reason that sportsbooks go broke or stiff their profitable players. Many offshore operators are inexperienced with bookmaking and simply bite off more than they can chew. It’s important to remember that if a bookmaker doesn’t pay its top 10% of winners, that may be enough to send them into profitability.