Teaser of the Topic
If you’re brand new to online gambling or always wondered exactly how sportsbooks make money, then this article is for you. We’ll take a look at everything you could possibly want to know with regard to casinos and how sportsbooks make money.
How do odds work in sports? What are bookmaker payouts, and do they differ from withdrawals? All these questions and more are covered in this guide on how sportsbooks make money. Consider this your cheat sheet for everything sportsbook and casino related!
With this guide on how sportsbooks make money, we’ll cover valuable information that you need to know to have a better experience when using sportsbooks and casinos. Namely:
- How do sportsbooks work
- How sportsbooks make money
- The difference between sportsbooks and bookmakers and what they actually are
- How sports betting works
- How odds work in sports
- How casino gambling works
After reading this article, you’ll know value bet tips and have a better understanding of how sportsbooks make money. Soon enough, you’ll be able to make an educated start on gambling, whether it’s for a career or just as a hobby.
What Is a Sportsbook?
Whether you’re learning about how sportsbooks make money or how to gamble at a casino, it’s best to start at the beginning.
As to what a sportsbook is, it’s a gambling provider that accepts bets on different events. Sports are the main activities they handle, but it’s becoming more common to find bookmakers that allow betting on events like politics and entertainment industry awards.
Most bookmakers now offer bets on martial arts, chess, and eSports (multiplayer video games like DOTA, League of Legends, and Counterstrike).
Anything you want to bet on, you’ll almost certainly find it at a sportsbook.
How Do Sportsbooks Work?
Now that you know what they are, how do sportsbooks work? And how do sportsbooks make money?
How sportsbooks make money is quite simple. They make money by allowing bets, whether it’s on sports or one of the more unusual offerings mentioned above. Let’s take the Major League Baseball World Series as an example. A sportsbook can offer bets on not only which baseball team you think will win overall, but who the best player is, or how many home runs a team scores, and so on.
As for how sportsbooks make money from doing all this, it’s all down to what’s referred to in the sports industry as ‘vig’ or ‘the juice.’ In other words, sportsbooks charge a cut to offer the service. This cut is calculated from the total bet as being the difference between what a player has to wager and what that bet pays back. That’s how sportsbooks make money.
How Does Betting Work?
The questions of how does betting work and how do odds work in sports are essentially the same as the two, while separate ideas are intrinsically linked.
When you place a bet with a bookmaker, your wager relies entirely on odds. These are usually presented by a sportsbook as fractions or decimals, although the best sportsbooks will let you switch between various odd layouts.
For example, you might bet on a horse to win a race, with odds shown as 9/1. This means that for every $1 you bet, you get $9 back if the horse wins. If this was shown as a decimal, it’d be odds of 10.0. However, instead of paying $10 on a $10 bet, you’d be charged $11. The $1 extra is kept by the bookie as their cut, which is how sportsbooks make money.
So how do odds work in sports? It does depend on the sport, as there are often various elements at play that go into calculating the odds.
If we stay with the horse racing example, the condition of the track, past performance of the horse, the skill of the jockey, and reputation of the trainer all factor into the odds.
If we looked at the NFL Super Bowl, sportsbooks have to take into account not just the recent game history of the competing teams, but any injuries players may have sustained, the coach’s known gameplans and so on. As you can imagine, calculating odds can quickly become tricky.
Ultimately, it all comes down to probability. Every event, whether it’s a football match, a martial arts tournament, or a game of poker, only has a certain number of outcomes. All betting odds do is present the probability in a way that’s easy to read. Read our sportbook lines guide for more information.
How Do Bets Work in Casinos?
Now that we’ve covered how sportsbooks make money and how they work, how do bets work in casinos? After all, how sportsbooks make money is really a different topic entirely.
Each sport has its own associated vocabulary, and it’s the same with casino games. Just as bookmakers have ‘the vig’, online and brick-and-mortar casinos have ‘the drop’ or ‘the handle.’
The two terms are used interchangeably, but there is a slight difference between them. The handle is the overall amount of money that a gambler places as bets, whereas the drop is money a player trades for chips to use in table games. The reason they’re considered interchangeable is that both cases refer to money given to the casino.
So how exactly do casino bets work? Any reliable casino games guide will tell you it all depends on the game.
We couldn’t possibly list every term related to casino gambling, because just as how vocabulary depends on the game in question, so too can it change depending on the rules of a game.
However, popular casino games such as table games like roulette, blackjack, and baccarat, all involve a dealer who either hands out the cards or watches over the bets. Games involve rounds, and at the start of each round, the dealer invites players to place their bets. The dealer then spins the wheel or deals cards, depending on the game. As you can see, the drop is not entirely the same as the vig, which is how sportsbooks make money.
Slot machines are a lot simpler in that it’s down to you as the player to place the bets. For example, you might want to wager $10 on your next spin, with the payout increasing as the initial amount. In other words, the more you bet, the more you could win on certain games.
Many popular slot games also feature the ability to play for free, so wagering can be done for fun. This is an effective way to get used to a game’s mechanics before deciding to bet real money. Understanding how sportsbooks make money and how betting strategies work, can turn out to be very useful.
What Are Casino and Bookmaker Payouts?
How sportsbooks make money is not the only topic of interest. Beyond the question of how sportsbooks make money lies an entire plethora of questions.
After how sportsbooks make money the next thing you’ll want to know about is a payout. Some gamblers may be confused between withdrawals and payouts because they are closely related. A withdrawal is when you take money out of an online gambling account, whereas a payout is the winnings from a bet. Basically, you withdraw payouts.
Bookies always payout when a wager is successful, but these and casino winnings don’t always necessarily involve a team or participant winning a match or race. For example, you might wager on a football player to score a set number of goals, or for a horse to finish in 4th place.
Likewise, in a casino, roulette doesn’t have typical ‘win’ conditions, but rather successful bets. You might bet on the ball landing on ’10’ or go for 50/50 odds and bet on the ball landing on a black space. Slots also rely on luck, as the payout or jackpot usually involves spinning a set line of images. How casinos make money and how sportsbooks make money are really quite different.
What Other Betting/Casino Guides & Strategies Are Available?
As promised, you now know more about how sportsbooks make money. As previously mentioned, there are, of course, many other aspects to gambling, including vocabulary specific to sports and casino games.
We highly recommend browsing our other US sports betting guides if you’d like to know more about specific betting strategies like how to gamble at a casino, or even about betting rules.
You can also eye the gambling dictionary, all the different kinds of bets you can make on different sports and games such as sportbook lines), and which bonuses and promotions are recommend. In addition to telling you how sportsbooks make money, we have a whole host of things to teach you. You’d be surprised at the way casinos make money differs from how sportsbooks make money, for example.
If you’ve been wondering how sportsbooks make money, you now have a clearer understanding of sports betting.
There is still plenty to learn about beyond how sportsbooks make money, including the legal gambling age in different states and countries, which online gambling sites are the most reputable, and which types of bets would be best for your preferences.
Stick with our articles and reviews for all the latest information in the world of gambling.