Bookmakers is an honorable trade that has been bringing excitement to horse races and sports matches for more than a century. Whenever you place a bet on a sports event, there is always someone or some algorithm behind the scenes, providing odds. They are “making the book”, they are bookmakers.
For years, punters likely questioned the reason for the name “bookies” and if there are actual books involved when calculating the odds. Whether you asked yourself this question at some point in time, we will answer that one by diving into the history of bookmakers.
So, why are bookies called bookies?
Origins of the Term Bookies and Sports Bookmakers
To answer that first question, books were used by the earliest bookies. Instead of historical accounts, journals, or recipes, these books contain figures, mathematical tables, formulas, and other equations used for figuring out the various outcomes of a race.
Non-punters or those who are new to sports betting believe matches are a 50/50 market where people who bet on the winning team or participant will double their money. Bookmaking is much more complicated or else bookies will likely go broke with a 50/50 betting market.
Bookies balance the books to make sure they can make a profit no matter the outcome. Balancing the books involve setting the odds of the participants based on various factors such as their record wins and current condition. Upon finding the true odds of a match, sports bookies add their vig onto the market.
Vigs, or vigorish, is a cut of a sports bookie in each market. For example, you need to bet $110 for a team with -110 odds to win $100. That $10 is the bookmaker’s cut.
First Recorded Sports Bookmaker
A Lancastrian named Harry Ogden was the first recorded bookmaker in history during the late 1700s. During this time, horse racing was taking off in Britain and was prime entertainment among the upper and middle classes. Ogden set a strategic place within NewMarket Health in Suffolk County, which is a stone’s throw away from the nearest horse track. From there, he can easily reach out to punters who want to place bets on certain races while avoiding any complaints from track owners.
When people would bet on horses before Ogden, everyone places the same amount of money on each horse and the winner will take every stake. There was a fundamental flaw in this way of betting where certain horses are more likely to win than the others are. Ogden looked for a better sports betting method to make it fair and profitable.
At the tracks, Ogden carefully studies each horse’s performance and condition. He priced each horse with specific odds to reflect on their chances of crossing the finish line first. These odds are adjusted from the true odds of a race with the addition of his vig. There are two key points to Ogden’s formula which are fair payouts based on the horse a punter is backing and guaranteed profits no matter the outcome. This method of balancing the books has paved the road for modern bookmakers to make money out of pricing sports markets.
Introduction of Legal Sports Betting in Vegas
Sports betting in Las Vegas was already widespread when gambling was legalized in 1931. However, sports wagers were done by unlicensed bookies or inside legal turf clubs. 20 years down the line, the federal government aimed to regulate the sports betting industry and impose a 10% tax for legal bookmakers. Those taxes were driving bookmakers out of business, forcing them to find loopholes to avoid paying taxes.
In 1974, the federal government eases its taxes on sportsbook makers by bringing them down from 10% to 2%. Jackie Gaughan took the opportunity on the approachable tax rate by building the first legal Las Vegas sportsbook within the Union Plaza Casino.
First Online Sports Bookmaker
Intertops was the first online sports bookie that launched in 1996. Before they had an online sports betting site, the brand launched in 1983 as the first bookie in Germany. Higher taxes within its country of origins forced the company to relocate to the UK.
Under the helm of Simon Noble, Intertops head of the internet expansion team, Intertops got the attention of major media outlets by making controversial predictions. This led to Intertops’ name appearing on MSN, Yahoo, and other big-shot internet portals of the 90s.
Sports bookies have been setting a fair gambling opportunity for horse races and various sports since the 1700s. Over the years, reputable bookmakers have been pioneers in various parts of the industry such as Las Vegas and the World Wide Web.