Q:

How do bookies make money?

A:

Quick Answer

Bookies, or bookmakers, make money by giving odds that attract an equal number of betters to each side. When this happens, the bookmakers is virtually certain to make money because of the commissions he charges to the bettors. If a bet is spread evenly among the two sides, the bookmaker uses his winnings from one side to pay the other side and keeps the commissions he receives as profit.

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Full Answer

People who place bets with bookmakers, such as sports gamblers, do not always have a firm understanding of how bookmakers operate. For example, a person who bets on football games might think that the point spread represents the relative strength of the two teams. Actually, the point spread is the bookmaker's way to try to even out the amount of bets placed on each team. If one team is getting more bets than the other, the bookmaker changes the point spread to attract more bets to the weaker side. This strategy increases the bookmaker's chances of having the bets on both sides match as closely as possible.

Even though this strategy is sound, it does not always work out for the bookmaker in practice. Attracting even bets on two opposing sides is difficult, and the bookmaker can still lose money in many instances if the outcome of a game goes against him.

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