How specifically do the books make money? (split thread)

[Bullajami]

Excellent stuff guys - thanks! Got some books on order.

Mudcat encouraged me to ask questions. Thought I'd throw this one in here for now.

At first blush, it would seem that the books are trying to get, more or less, equal money on both sides of a line, so that the losers pay the winners and the book keeps the juice. But that can't really be the case as the online books pay affiliate commissions from player losses the same way online casinos do. That would infer to me that the book is playing against the bettors, no?

To make a clear question, is the books goal to make money of fthe juice or off the juice and bets against the house?

[Mudcat]

Hey Bullajami. I hope you don't mind, I split your thread. I thought this was a good discussion topic on its own and I didn't want it to be buried. I'd like to hear what as many people as possible have to say.

[BuddyBear]

sportsbook ideally have an even amount of money on both sides thus they profit from the juice...

Not always the case though....so they end up rooting for specific teams to cover or win. More times then not they cover/win. The lines that are set are very difficult.

[mad]

Here's an answer to your question newbie, hope it helps. I stole this from a website called pro-gambler just to be clear, it's not my work but think it will answer your question:

However that perception doesn't apply concerning big-time bookmakers with plenty of working capital. Bookmakers with deep pockets are in a wholly different position than your friendly neighborhood bookie. Big-time books aren't so concerned with balancing their risk; they merely need to get 'enough' action on both sides of a proposition.

Suppose a total of $11,000 is risked by bettors to win $10,000 on a favorite, but only $5,500 is risked by bettors to win $5,000 on the underdog...Look what happens:

If the dog wins, the book makes a profit of $6,000. (He keeps the $11,000 risked by bettors on the favorite, and pays the underdog bettors their profit of $5,000.)

If the favorite wins, the bookmaker loses $4,500. (He keeps the $5,500 risked by bettors on the underdog, and pays the favorite bettors $10,000 in winnings.)

Essentially, then, in that example, the bookmaker is risking $4,500 in order to win $6,000. In that particular case, he actually breaks even if he can win only 42.9 percent of his 'bets.' Rather than laying $110 to win $100, as is the case with sports bettors, the bookmaker is in effect laying only $75 to win $100! Those are very, very big odds in favor of the house. To the house, when bettors have risked twice as much on one side as the other, every bet is +133! In order for you and me to win $6,000 we'd have to risk $6,600 - not $4,500.

[The Great One]

I always thought it would be confusing as hell to run a big book, but maybe not much so if you have alot of people helping you. With all the props and stuff like that, you'd always have to be on your game or you could go out of business overnight. Always watching injuries and news on ever game, having line movements, avoiding soft lines, getting $$ on both sides, having in some cases 200 games going on at once 24 hours a day all over the globe. Sounds like a headache.

[natrass]

I always thought it would be confusing as hell to run a big book, but maybe not much so if you have alot of people helping you. With all the props and stuff like that, you'd always have to be on your game or you could go out of business overnight. Always watching injuries and news on ever game, having line movements, avoiding soft lines, getting $$ on both sides, having in some cases 200 games going on at once 24 hours a day all over the globe. Sounds like a headache.

Thats delegation. I could never do that. Imagine delagating (potentially) your business every day and every night to 'underlings'. Thats tough.

[Bullajami]

Thanks mad. What you've posted makes sense, except I would think that it would be less a function of a book's deep pockets or getting enough action on both sides of a single proposition as it would be a matter of getting enough action across the spectrum of the book's propositions. In other words, I would think the book(s) need to make sure they are getting these favorable odds accross multiple lines in order to reduce their exposure and be consistently profitable.

Of course, deep pockets, heavy action on one line, and heavy action across all lines are likely to be directly proportional in a book, but it seems like a reasonably good distinction to make. (Unless I am wrong.)

However that perception doesn't apply concerning big-time bookmakers with plenty of working capital. Bookmakers with deep pockets are in a wholly different position than your friendly neighborhood bookie. Big-time books aren't so concerned with balancing their risk; they merely need to get 'enough' action on both sides of a proposition.

[The Great One]

Who invents the software these books use. I take it they have software that automatically gives lines out and changes lines to try to get an equal number. What company is that that makes it? Does Washington pressure them with all of the is anti-gambling crap?

[acw]

Well lets say that book A has team A on the ML posted as +105 and book B has team B also as +105. Common sense says that these books will not make any money unless they get (square) action on the other side. So for books to make money they need squares, squares and squares.

[pags11]

I do think some books to have opinions on games, thus the term opinionated lines I've learned about here at SBR...in theory it be nice to have even action on both sides, but I just don't think that happens a whole lot...