I'm curious why sportsbooks 'pool' all the bets they take, instead of explicitly matching up the specific people on each side of a bet the way head to head daily fantasy contests do. It seems like doing things the way they do limits the amount of action they're able to take in some cases. Instead of limiting bet size on a game to $5,000 or whatever, why don't they just let you put as much money as you want on a game, but make it conditional on their finding someone to take the other side of the bet?
Exactly, the OP described exchanges virtually to a tee. Bookies on the other hand are not afraid to take a stand now and then, so to say that they "never" gamble is false. Just look at Pinnacle.
Yeah, that is the benefit of an exchange. By pooling the money, they want it to be the exact same action on each side regardless so they win their 5-10% on wins. They change their spread accordingly when one side is bet more heavily.
put 100 players in a room and you'll probably find 70 different bet sizes... the first batch of exchanges all went bet for bet, so if there were three offers $10, $100 and $1000, and you wanted $50 - you got nothing, and had to wait for somebody else to come along.. maybe. Betfair pooled the liquidity and catered for nearly everyone.
You never know how big a book is by looking at them. Some games they might write one bet. The guy making a bet wants to know he's set there and then, none of this waiting around and I might get matched. That's why exchanges will only appeal to a minority of players.
In Vegas, you can make any size wager you want, providing that you set it up with the Casino Manager. It is common prectice for Vegas books to "sell" wagers to other books, incase they get a run on a certain team. Many offshore books do not have this advantage. Many offshore books also have no other source of income other than the wagers that they take in. Vegas has a huge casino to make up for a bad week. Remember, most Vegas books are now controled by a few companies. MGM-Mirage, and Harrah's own numerous hotels on and off the strip. So if Caesars takes a lot of action on a team, it can be offset by all the other Harrah's based hotels in Vegas. The bigger the total operation, the more chance of the operation profiting. Offshore books really are at a disadvantage, which is why so many of them have problems.
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Why Do Sportsbooks 'Pool' Bets?
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