What is a Bookmaker?
Yes, it is a valid question on different levels. For a complete novice, the term may be very familiar, even having just heard references to one in the media. It is likely that even if you have never been in one, you will have passed by a High Street bookmaker. So you may be somewhat familiar with the term, but what really is a bookmaker? How do they operate and what do they actually do? Well for starters, you can look at them as the person, the middle man against who you are betting. Looking at the very simple and basic methodology of fixed odds sports betting on a football match, the bookmaker will calculate the odds on the outcome of a football match. What they will do, is essentially lay a bet, which means that they will offer odds (which is based on calculations of percentages) of an event not happening. So if the match was Wigan v Chelsea, then the bookmaker for example may set a price on Wigan win at 5/1, which is essentially setting the odds against Chelsea winning. Once the bookmaker sets the odds against something happening, it is then up to you to agree with the bookie and take their odds on Wigan winning for example, or you can back the bet by taking on odds on the event of Chelsea winning at much lesser odds. There is of course the third option of the draw to factor into the match. The more money which goes on Wigan, the more likely the bookmaker is to make a profit, because Chelsea would be expected to win.
The bookmaker has to make a profit somewhere down the line and this is important to remember as punter. It is in the bookmaker’s interest to set odds from which they can make money. That’s how they survive, and that is how they are able to offer more and more bets and service online. If you took all three options of a home win, a draw and an away win, and worked out the percentages behind the bets, they wouldn’t add up to 100%. For example, Chelsea may be thought to have a 50% chance of winning, Wigan 30% and a draw 20%. But if the bookmaker followed that, there is no profit margin there for them, so the actual probability percentages of the three outcomes happing (which are then translated into odds) would add up to more than 100% so that the bookie will stand to make a profit on bets. Of course, if Wigan won this match, the Bookie would stand to lose a lot more than if Chelsea did at a much shorter price. The longer odds are set to tempt you into parting with your cash, as the event is far less likely to happen, but that is what bookies count on.
A bookmaker runs a service, taking bets, and they will put out odds based on risk, all with a profit in mind. For all intents and purposes you could look at it as a challenge to beat the bookmaker. You can bet against them to try and make the biggest profits that you could. That is part of the fun challenge of betting, getting one over on the bookmaker. The bookie takes your cash as a stake, and you are striving to get it back with interest. The bookmaker controls the markets, sets the prices and accepts your bets. A lot of the major bookmakers offer High Street service, online services and telephone betting to keep you connected with the world of betting. The more opportunities that are out there, the more profit they are looking to make. It is the bookmaker which throws down the gauntlet of betting odds, it is up to you as a punter to try and beat them.