How do Bookmakers Work and What are Betting Systems?

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Online Bookmakers – Everyone knows the saying, “The house always wins”. But is it true and if so, how can gamblers make a consistent profit, how can they turn it into a career? bookmakers use a series of complex algorithms, systems, and rules to turn a profit, but gamblers have their own rules and systems and in this guide, we’ll cover both sides.

How do Bookies Make Money?

Sports bettors are in direct competition with bookmakers, with the former using their knowledge and strategies to get the upper hand and the latter relying on their complex systems and algorithm. When you gamble, you go up against the bookmaker and need to get the better of them if you’re going to beat them consistently.

There are a few things that bookmakers do to try and prevent this:

 

The overround or vig, is a term used in bookmaking to describe the bookmaker’s share. The best way to understand this concept is to picture a coin flip. There is a 50/50 chance that the coin will land on Heads/Tails. If you were betting with a friend, you’d expect a 50/50 return—if you win, they give you €10; if they win, you give them €10.

But a bookmaker has to account for more than just two bets and can’t leave everything to probability. If they were offering 2.00 (Evens; +100) odds, they’d need to hope that more people backed Heads and that Tails was the eventual winner (or vice versa). But you’re the one gambling, not them.

To account for this, they would offer odds of 1.90 (10/11; -110). This means that even if 50 punters back Heads and 50 back Tails, they will still make a profit.

Of course, not every betting market is as simple as a coin flip, but bookmakers have other tricks up their sleeve to help them increase their chances of securing a profit.

2. Traders

All offline and online bookmakers employ skilled traders whose job it is to set the odds. These traders are incredibly knowledgeable in their chosen sport and use that knowledge to build incredibly specific odds, taking form, statistics, and other key things into account.

As an example, let’s suppose that Newcastle United is playing at home against Manchester City in a cup tie and the bookmaker is setting the, “Which team will qualify” market. There is no draw in this market, just a winner and a loser.

If Newcastle has been lingering near the bottom of the Premier League table and struggling for results, while Manchester City has been cruising at the top, the bookmaker will greatly favour the latter. However, they will also look at the fact that Newcastle has home advantage and is more likely to play a full-strength team. Once they have considered injuries, suspensions, and even the weather, they may determine that Manchester City has a 70% chance of success compared to Newcastle’s 30%.

However, as with the coin flip example, they don’t make money by waiting for the bets to come in and then hope that the more profitable option succeeds. So, they may add a 5% or 10% margin on top of this, with odds that represent probabilities of 65% and 25%.

3. Balancing the Books

If we stick with the Newcastle/Manchester City example, what happens if a sudden influx of bets come in for Newcastle? They have much higher odds, so it doesn’t take much for the bookmaker to enter the red.

They may find themselves in a position where a Manchester City win would turn a profit but a Newcastle win would lose money. To get around this issue, the bookmaker will balance the books, guaranteeing a profit regardless of the outcome.

To do this, they will change the odds in real-time. Every time the balance shifts, the odds change, creating a situation where they stand to make a similar sum of money regardless of the outcome.

The best example of this can be seen in the sport of horse racing. Weeks before the race, horses are given very loose odds based on form and probability. But because traders often have very little info to go on (especially if the horses have yet to run their first race) they will simply wait for the bets to come in and then adjust the books at every turn.

If there are bets of $5,000 on every horse and then $100,000 is suddenly dropped on an outsider, they assume that the bettor knows something they don’t and the odds greatly reduce as a result. This is why horse racing odds fluctuate so heavily, especially in the minutes leading up to the race, as this is when online bookmakers take most of their bets.

The Simplified Version

If all the above is a little too complicated and you’re still not sure how offline bookmakers, online bookmakers, and trackside bookmakers operate, here is a shortened and simplified version.

Bookmakers cannot control the outcome of a sporting event, just like an online casino can’t control the outcome of a Roulette spin or a Blackjack hand. They “Lay” a bet for a punter and payout in the event that this bet wins.

Blackjack and Roulette are actually great examples of how their process works. In a game of Roulette, all outcomes are carefully weighted, comparing odds to probability. In American Roulette, you have a 1 in 38 chance of landing a single number, but the payout is only 36 to 1, allowing them to profit from the rest.

If you bet on Red or Black, the payout is 1 to 1, which means a €5 bet will return a €5 win, but the probability is 47.37%/52.63% in the casino’s favour. These odds may not mean much to a single player over a single session, but to thousands of players over millions of sessions, it keeps the casino in the black.

This is pretty much how bookmaking works as well. The odds are never a direct representation of the probability, ensuring that when all bets have been accumulated over a single contest, they can almost guarantee a profit. As with Roulette, there will be some big winners and you could easily be one of them, but the casino will still win in the long-run because for every big winner, there are multiple losers.

How to Beat the Bookmakers?

So, if the bookmakers always have an edge, then how can you earn a profit? Well, it’s important to remember that everything we discussed above covers long-term bets taken from thousands of punters across hundreds of markets.

As a punter, your goal is simply to be on the winning side more often than not and often enough to offset the bookmaker’s share. This isn’t as easy as it sounds, but if you think like a trader and take several factors into consideration, you can get a profitable edge. There are a few ways you can do this.

Firstly, it’s important to budget carefully and don’t let your emotions get the better of you when you gamble. This is what bookmakers rely on. They encourage you to place bets on markets you know little about and even on your favourite teams, but doing so means your judgement is clouded by favouritism or naivety.

If you budget carefully, think about every bet that you make and only bet on the markets that you know a lot about, you can greatly improve your chances of securing a successful profit every time you sit down to play.

There are also a few things you can take into consideration that a trader and a bookmaker may ignore. For instance, as discussed above, they are keen to balance the books, which may mean that the odds are not representative of the probability and are much more in favour of the likely outcome.

If we return to the Newcastle/Manchester City match, more bets may come in for Manchester City after it is announced that they are playing a full-strength squad and are desperate to win the cup. This means that the odds for Newcastle will be greatly inflated, much more so than the probability suggests.

But what if you have a really good feeling that Newcastle will win, that the fortress of St. James Park will be enough to spur them on, their quick wingers and set-piece play will target specific weaknesses that Manchester City have? If you bet on them and win, not only have you beaten the bookmaker, but you’ve beaten the books, and gained an unexpected edge and profit.

You haven’t necessarily outwitted the bookmakers, but you have predicted an outcome that few other punters saw and in doing so you have beaten the bookmakers.

What are Betting Systems?

Every sports betting site claims to have a fool proof betting system, one that can beat the bookmakers without fail. The bad news is that there is no guaranteed way to beat the bookmaker and no system that can help you to do this with mindless, systematic betting.

As discussed already, if you want to beat the bookmaker then you need to do your research, budget carefully, and work hard. You also need to accept that losses will come and there will be times when you can’t seem to buy a win, but if you persist then you’ll be okay in the long term.

To show you just why many “beat the bookmaker” betting systems are flawed, here are a few of the more popular ones.

The Gambler’s Fallacy

The Gambler’s Fallacy rears its head in many betting systems but no self-respecting strategist or gambler would ever assume that it’s an effective strategy for beating the bookmakers.

The Gambler’s Fallacy dictates that if a coin flip lands on Heads three times in a row, there is a much greater chance that it will land on Tails the next time. It’s a strategy that is used consistently on games of Roulette as well as sports betting. However, there is no cosmic force overseeing probability and creating a balance.

If a coin lands on Heads three times in a row, the odds of it landing on Tails the fourth time are still 50/50.

Of course, sportsbetting isn’t just about statistics and probability. If a big team like Manchester City losses several big games in a row, there probably is a greater chance that it will win the next one, but only because jobs, titles, and paycheques are now on the line, and not because of some cosmic probability.

Betting on the Same Market

Many experienced sports bettors have their favourite bets and will bet on these during every game that they watch. For some, it’s the Over or Under Goals Total, for others, it’s the Both Teams to Score bet. The problem is, if you’re betting on these during every game then it becomes less about probability and more about habit.

You keep placing those bets because you’re worried that if you don’t the bet will win and you’ll be angry with yourself. This is why so many people choose to play the same lottery numbers week after week.

It’s important to bet on the market that you believe has the best chance of success and not the market that you simply bet on the most; you’re betting on sports, not playing the lottery.

Matched Betting at Online Bookmakers 

This is one of the most common methods of beating online bookmakers, but it’s also one of the most flawed. The idea is that you collect as many free bets as you can, search for the best odds, and then pit bookmakers against one another using your free bets.

For instance, if you’re betting on a tennis match between Player A and Player B, you would join multiple sites, collect multiple Free Bets, and then find the site that has the best odds for both of these. You then do a calculation to predict a consistent return regardless of the outcome.

If Player A wins, you have lost most or all of your balance on one site, but you’ve significantly improved your balance on another.

There are several issues with this strategy. Firstly, the difference in odds between one bookmaker and another are marginal, and unless you’re betting huge sums, you won’t win a lot of money. Secondly, Free Bets come with strict wagering requirements and you can’t simply withdraw at will.

But most importantly, it’s not a fun strategy but it is one that requires a lot of work. Even if you do make a consistent, withdrawable profit, you may discover that you’ve basically worked your weekends away for what amounts to just €2 or €3 an hour.

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