You've probably heard the expression "the house always wins," or you may have used it yourself once or twice at some point. After all, online sports betting sites are still businesses that need to generate profits. So how do online sportsbooks always profit?
Principles of Sports Bookmaking
To make money, sports betting operators adjust the odds and take a commission from each bet ("the vig"). The odds are the key to how much profit (or loss, in some cases) a bookie would get out of the game. Although these odds are based on real factors such as player and team history, injuries, and even the projected weather, sportsbooks often "tweak" odds to ensure that they still make a profit out of all the money wagered regardless of the outcome. A bookie's cut is the reason why sports betting is not a zero-sum game.
Sports bookmaking is still a business and thus, must earn money. In principle, the way bookmakers make money is simple: they offer odds for a game to the bettors, take bets from these people, and payout those who win.
Why Do Sportsbooks Always Win
Here are some strategies bookmakers employ to make sure they always win.
Offering High-Risk Bets
Punters, especially newbies and those who like to chase easy money, love high-risk bets. These bets hold the promise of a huge win, but with a huge drawback, too - the chances of winning it are smaller than the usual bet. Those who bet to risk are a revenue stream for operators than those who bet to win.
An example of this is parlay bets, where a player combines two or more types of bet and places it as one accumulated wager. If all the parts (or legs) of the parlay are won, a huge payout is expected. However, there's generally always a bet that is losing which voids the entire parlay. Punters who go for parlays often try to get massive payouts (and massive underdogs) and therefore tend to lose a lot more than they win.
Additional Profit Through Sportsbook Vigs
Take for example a game of coin toss, where there are two possible outcomes. The true odds for a 50/50 chance of an outcome happening would be 2.0. With a balanced action, say that 50 people wagered for tails to appear, and another 50 for heads. A bet of $10 would mean total action worth $1,000. However, they would also have to pay the winning bettors a total of $1,000.
It's therefore a break-even... unless the infamous vig comes into the picture!
Updating or Changing Lines
If the bookies would present the real or true odds, then there would be no room for them to make a profit out of the bets. The vig, then, would be applied by tipping the lines and odds a little to make room for their profit. Thus, with the example given above, the odds of one side could be adjusted to -110.
However, another challenge comes with imbalance action - when significantly more people are betting on one side than the other. In cases like this, the bookies "tip" the odds in order to entice more bettors to bet on one side (which then would balance the number of bets).
Studying Punters Betting Behavior
Another way bookies make money is through analyzing the betting behavior of the punters. Usually, the squares (the opposite of the sharps, the "noobs" of betting) always bet on the favorites. However, the favorites do not always win. When the public pours in their money on the favorites and the sides lose, it's a huge payday for the bookies.
Setting a Bet Cap
Many sportsbooks are known to set a limit on some bettors, especially if it is a known sharp (or someone who is known to always make a winning pick). While this is not true for all bookies, setting a cap or limit to bets happens when the bookies need it to.
If they see that a sharp placed a huge amount of money on one side of the action, the tendency is for it to ruin the balance and thus place them at risk of losing money than making a profit. However, if a betting cap is set beforehand, a situation like this can be prevented. Unless fraud can be established, online sports betting sites must pay winners out.
How to Win Against Sports Bookies
How do you win against the bookies by making money out of their markets? Here are some tips.
Look Up Sharp Betting Activity
If you want to know which pick is the real good pick, the place to look at is the sharp action. What you want to happen is to be on the same side as the sharp bettors.
This is where observing the Reverse Line Movement comes in. When the odds move in the opposite direction as that of the percentage of wagers, you know that the bookies want you to bet on the other side of the square side. Thus, the opposite side is where the sharp action is.
Shop for the Best Line
Not all bookies offer the same value for their odds. Some are better than others. This is why shopping around - or looking for the best lines - is necessary. Although the difference in the lines may not seem that much at a glance, the difference it makes will stack up in the long run.
Bookmarking is still a business, so it is natural for sportsbooks to implement strategies to ensure they make money out of each game. However, with the right mindset and strategies, you can still take things to your advantage and up your chances of making your own profit, too.
This article was published on March 5, 2022, and last updated on October 25, 2022.