The bookies are trying to make money from the punters and the punters are trying to make money from the bookies, but the odds are, and always will be in favour of the bookies. If a punter is to beat the bookies, they need a thorough understanding of the odds and what they are betting on. It is possible to make a consistent profit in betting but you need to know what you are doing and how to apply the right techniques. However, the bookies have set everything up to make it as hard as possible for the punter to win, while still making it an attractive proposition for the punters. Let’s take a look at how the bookies operate and how they make their profits through the mathematics of odds.

The techniques of the bookmaker

The bookmakers use certain techniques to always give themselves the advantage. To make a successful bet, you need to overcome this advantage, it’s you against the bookie. First, you need to understand how the bookmaker has an advantage across the board. Bookmakers can’t control the outcome of the sporting event but they can control how much money they stand to win or lose.

They set the odds for all the bets they offer, which is how they manage to consistently make a profit. The main technique that bookmakers use is to always put the betting margin in their favour. This means every bet a punter makes and wins, the bookmaker will still take a cut of money, so they can cover their profits. This is known as the vig, vigorish, edge, juice or overround. The same thing is applied in casino games.

The bookmaker’s mathematics of odds

Online betting firms have a team of sporting experts (traders) who set the odds for their specialised field. They use a variety of statistics and their own knowledge to set a betting margin.

The traders have to take into account every aspect of the event, including injuries, home and away form, referee, stadium, fans, new signings and many more aspects of the game. Then they have to calculate the odds and set a price for the punter. Here’s an example of how they set the odds and where the bookmakers advantage comes into play.

OddsProbability
Team 14.54022.03%
Draw6.81014.68%
Team 21.53165.32%

When you add up the probabilities, it comes to 102.3 percent, which means the bookmaker gives themselves a cheeky profit margin of 2.3 percent. Bookmakers can price events between 101 and 120 percent, depending on the betting attraction.

The betting attraction

Strategic bettors will look to boost their returns by looking for the longest possible odds. The higher the bookmaker margins, the lower the odds, this gives the bookmaker more profit on losing bets. Make sure you know the margins. It’s good to always shop around for the best bets on popular markets, look for a bookie with a lower margin. There are sites dedicated to comparing betting odds so you can quickly find the best odds for your bets.

How it all works

To keep it simple, the bookmakers don’t gamble, only the punter gambles. It’s up to the traders to ensure that they can balance the books so that regardless of the event outcome, a profit is always made. When the odds are set, the traders will monitor the betting activity and how the punters bet across all potential outcomes.

If bets are placed to the trader’s calculations, then their profit margins will remain stable, but if the majority of the punters are placing wagers on one outcome then the bookies could stand to pay out a large amount a money if their bet comes in. Before this happens, the traders will recalculate the odds to try and maintain that balance. The adjustments of the odds make it a ‘sure bet’ for the bookies and that’s how they enforce stability and consistent profit making through the mathematics of odds.

Bookies will lay off bets

Another way that the bookmakers keep to their profit-making ways when the punters are all betting on Team B when Team A are high favourites, if Team B wins then the bookmaker will be paying out large sums and will take a heavy hit.

So the bookmakers lay off the bets, this is basically a backup bet. The bookie will place a wager themselves using another bookmaker (a competitor). That way if Team B wins then at least the bookmaker makes a load of money back from their bet to cover the losses from all the punters betting on Team B to win. Thus, proving that the bookmaker never gambles.

The offers and promotions

Bookmakers often offer novelty bets to further lower the margin while seeming to give the punter better value. Punters believe that they will be shortening the odds and increasing their chances, but in reality, the bookmaker had likely over-priced the odds to begin with. It’s not uncommon for bookmakers to push offer on multiple outcome markets, this is down to the higher margins to play with. So, they can offer the punter ‘a good deal’ while maintaining a solid profit.

In most cases, it’s still worth the punter taking the offer, but with high margins, the odds of winning are rarely altered.  There are plenty of tricks that the bookmaker plays out to make money, they will offer great odds on big bets, like the outright winner of the Premier League in the hope that the punter will continue betting with them. But, there are rare cases when the bookmaker gets it wrong (Leicester winning the Premier League at 5000-1).

It all comes down to the mathematics of odds

The world of bookmaking is full of maths and intimidating numbers, but it’s all pretty simple. The principles behind betting never change, the odds are forever in favour of the bookmaker, therefore, only the punter gambles. Punters need to bet smart to have any chance of making a steady profit against the betting firms. That means extensive research and knowing your markets.