Do sportsbooks lose money on baseball?

[Mudcat]

This is something I have been hearing for years. I'm not sure if it is an urban myth that keeps getting passed around because it sounds kind of inside to say it - or if there is truth to it.

My gut tells me the sportsbooks make money. While our MLB forum here is great, I have looked at lots of other baseball capping forums over the years and there seems to be just as many bad ideas floating around as with every other sport. There are always exceptions but the over-riding long-term vibe is consistent losing.

For books with reduced juice, the hold is obviously lower but I still think they must be making money. For books without reduced juice, the volume must be down but they must make good money on the action they take.

Doe anyone actually know how the books do with baseball?

[bigboydan]

i feel they do lose money on bases.

[Doug]

I think a lot of the bets aren't really bets, but scalps, or rollover meeting bets, that don't make the books ( as a whole) any money.

The books still have their overhead to meet, so taking expenses into account they probably lose.

Just winners and losers, most probably win a little.

[BuddyBear]

you can say all you want about 8 cent and 10 cent and such and it is true volume may down for baseball compared to the other big sports like basketball and football....but when you have people who are laying -140, -150, -160, etc...consistently you know books can't possibly be losing money and we all know who the public is going to bet on...

books are not making as much money in baseball b/c of the lack of volume but they certainly are not in any danger.

[RickySteve]

Don't start getting too sympathic for the sportsbooks. There are legions of baseball squares out there. Read the 2+2 Sports Betting forum. I wish I could book those idiots' action on a nickel line. For example, some guy just posted a "system" where he Martingales the road team in each series laying -1.5. This generated serious discussion of its merits.

[pags11]

like imgv points out, with most of the public betting favorites I imagine most books make money during baseball season...I think peak gambling season is during college football and college hoops where people feel they have the biggest edge(granted you have a lot of NFL, NBA and NHL action during that time)...but I think a lot of gamblers (like myself) don't bet baseball as it was the most difficult for me to handicap, thus the lower volume in action these days at books...of course, there are many succesful individual baseball bettors and even syndicates, but books definitely make money during baseball season...

[Fishhead]

The hold in bases is around 2-3% overall for books.

This was the norm for Vegas books when I was a supervisor there.

Most were thrilled to death if they could hold over 4%.

Now compare that to football, and its a HUGE dropoff.

[Mudcat]

Dropoff, I totally buy. No question about that. But, from what you're saying, they weren't actually losing money, right?

[tacomax]

It depends on how you define "losing money". Are we talking about losing money from wagers placed or losing money from a business point of view?

If you look at a regular -110/-110 book. They have a theoretical 4.55% edge on regular NBA/NFL/NCAAB wagers. In the baseball season where there is a lot less betting opportunities on other sports, they're looking at a theoretical hold of about 2% with their dime lines. So, that's a lower hold and a lower volume.

Sure, they probably make money in absolute terms most years since they've got a built-in house edge (assuming that the lines are near enough spot-on) but do they show a profit over the course of the baseball season when wages and other business costs (rent, wages, depreciation etc.) are taken into account?

[BuddyBear]

people get real here....if vegas was losing money in baseball they wouldn't offer it or they would rectify in such a way that gave them a greater edge. if people were making money off baseball...why would they bother betting other sports since baseball would be considered beatable. Of course other sports draw more interest but to believe vegas and online books are losing money during baseball you have to be living in a fantasy world.

[tacomax]

A company offering a range of services might not make a profit on each part of their business. Profits in these other areas could be used to cover losses on others and, as long as the losses are in an "acceptable" range.

Sportsbooks may make money during the baseball season. Sportsbooks may not make money during the baseball season.

But to say that they can't lose money during the baseball season since they wouldn't offer MLB lines in the first place shows a lack of business common sense.

[Dark Horse]

Sportsbooks make money on all sports. It's called vig. The idea is to balance the action on both sides. And even when they don't balance the action they're getting it at +110 (or +105), rather than -110.

The only real risk (apart from bad management) a sportsbook runs is that it can't cover short term losses. In the long run they win, because there are many more squares than sharps (plus books can always follow the sharps by placing bets themselves).

[tacomax]

Sportsbooks make money on all sports. It's called vig. The idea is to balance the action on both sides. And even when they don't balance the action they're getting it at +110 (or +105), rather than -110.

Yes, they theoretically make money on all wagers due to their hold (assuming a number of variables hold true). However, they can be forced into a loss over the season if the lower volume and lower hold of the MLB season doesn't provide sufficient revenue to offset the costs.

I'd say that that is a distinct possibility with a lot of books. However, the revenues from the rest of the season should by far outweigh any slump over the baseball season.

[BuddyBear]

97-99% of all sports bettors lose long term....the fact that we are having this conversation is ridiculous. The idea that sportsbooks lose money on a sport where guys are betting everyday with ridiculous vig (yes the majority of people are betting lines like -140, 150, -160, etc...not +140, +150, +160) is not accurate perception.

[Dark Horse]

Tacomax, a sportsbook would have to be run be the lunatic asylum to be 'forced into a loss' over an entire baseball season.

The vig always works in their favor, and if they don't like the balance for any game they can even it out by betting on that game somewhere else.

[tacomax]

Tacomax, a sportsbook would have to be run be the lunatic asylum to be 'forced into a loss' over an entire baseball season.

The vig always works in their favor, and if they don't like the balance for any game they can even it out by betting on that game somewhere else.

You're talking about how theoretical VIG and theoretical profits. I'm talking about actual revenues and actual costs.

A sportsbook (or a casino) should always make a profit on a wagers placed. However, with lower VIG from baseball and lower volumes for the whole season there is less of a guarantee that the revenues from MLB can cover the operating costs of the business. If the level of wagers placed at Betcris was $1000 for the entire baseball season, do you think they would have a profitable season?

On a different subject, the manufacturers of razor blade handles sell their products at a loss. I guess they should be to the lunatic asylum as well.

[SBR_John]

As Fish pointed out the hold on bases is only about 3% and even less with the reduced juice. Most books have a cost of doing business of 2-3%. Bottomline is bases is not a money maker for the house but it keeps players around until harvest time: Football.

[bigboydan]

I know quite a few locals that just will not take baseball action. It's just not worth it in there eyes, and I can't say i blame them either. When August rolls around, just wait and see how much chalk really cashes in on a daily basis.

[Dark Horse]

I don't play baseball. Not worth it to me. lol.
Never thought books would feel the same way.
Learned something new again.

[tacomax]

Bottomline is bases is not a money maker for the house but it keeps players around until harvest time: Football.

John gets it.

There are big new customer acquisition costs in the gambling world and the potential revenue from each customer is high. After spending masses of money to sign-up these little cash cows the books aren't going to shut up shop over the summer and watch them go elsewhere.