Do Bookies Always Win?
We just finished teaching you how bookies make money.
We illustrated how bookmakers are able to guarantee a profit through the commission (vig).
However, we also mentioned that having a balanced book is a perfect situation that isn’t going to be feasible for every event/market. Therefore, bookies don’t always win.
The goal of a bookie is to make money long-term. In order for a bookie to always win, they would need to have a balanced book (even action) on every single betting market.
That’s not going to happen, but with proper money management, you will win long-term.
It’s common knowledge that the majority of sports bettors lose money. They’ll have winning weeks as well where you need to pay them, but most players will lose money long-term.
Tips for Mitigating Your Risk As a Bookie
Let’s say you’re a local bookie in Pittsburgh and the Steelers are playing in the Super Bowl.
Your players are likely going to hammer the home team Steelers. What’s the next step? Well, if you have entirely too much exposure on the Steelers, you should lay off some of the action.
Put it this way, if you can’t pay out your players if the Steelers win because you’re overexposed, you need to use a pay per head (PPH) layoff account to lower your overall risk.
There are also some other tips to help mitigate risk as a bookie.
Firstly, offer as many betting options as possible. For instance, the Super Bowl will have hundreds or even thousands of alternate betting markets and props (team/player).
In an ideal world, your players will spread their action around. They may bet $100 on the Steelers to win and then wager on four props for $25 each, which is what you want to happen.
You want your players to bet volume. This means you want them to bet on a bunch of wagers rather than load up on one wager, as it spreads your risk around and gives you a better chance to profit.
Secondly, you need to keep credit/betting limits in line with your bankroll.
What would happen if a guy bets a 10-team NFL parlay and wins $100,000? Would you have the funds to pay him out? That’s unlikely, which is why you need to keep strict limits to win as a bookie.
If you have a bankroll of $10,000, you can’t expose yourself to parlays that could payout more.
Plan for the Worst, Hope for the Best
As a business owner, you should always plan for the worst, it’s simply good business.
Obviously, we don’t want things to go as bad as possible, but we need to have a plan in case that happens. You should always be prepared to have a losing week or month.
Bookies almost always win long-term if they utilize smart money management, but there are going to be weeks where you need $5000 to payout a guy who went on a heater.
Follow the tips above and maintain a bankroll of liquid cash, which we discussed last lesson and you will make money. Just don’t expect to make money on every single bet placed by your players.
You should always do your best to have balanced action. Make sure you learn how to move the odds because this is the first thing you should do after receiving a big bet.
If you move the odds enough, you’ll be able to get action on the opposing team to balance the book and any time you’re able to have a balanced book, you’re guaranteeing yourself a profit.
At the end of the day, bookies don’t always win, but we win long-term because of the vig.