How To Be A Bookmaker

1. How To Be A Bookmaker Website
2. How To Be A Bookmaker Online

We look at how bookmakers set their odds so that they would make money off the bettors. A bit more on decimal and fractional odds: https://support.skybet.com. The most common forms of payment from bookmakers are Western Union, Money Gram, check, bank wire, re-loadable debit cards and bitcoin. Ease of Funding Makes a Difference. If you plan on using your credit card to fund your account, this is a very important consideration. Many online bookmakers struggle with processing customer credit cards. If you are looking to be a professional bookmaker then the first thing you need to do is get a professional online sportsbook. Many people would assume that this would cost a lot of time and money to create with a team of web designers and technicians, which would be true, however there is a much simpler and cheaper way to be your own professional bookmaker.

A common misconception is that a bookmaker’s job is simply to “balance the book” to guarantee profit. While a bookmaker will often manage their risk across all the available options in a market, this might not always be the case. Read on to find out how often a bookmaker balances their book.

Last year I wrote an article examining odds setting from the perspective of the bookmaker, focusing on the favourite-longshot bias. My finding was that it will often be optimal for a rational, profit maximising and risk minimising bookmaker to introduce a favourite-longshot bias into their odds.

I wanted to write another article looking at odds setting and variance from the bookmaker’s perspective. In this article I examine the likelihood of a bookmaker balancing their book (profiting regardless of outcome) on any given market, as well as optimal odds setting strategies when bettor biases are introduced.

Balancing the book

A bookmaker isn’t always seeking to balance their book. Given their pockets will be deeper than most clients’, bookmakers will generally welcome variance, especially when they think they have superior predictions. The belief that a bookmaker is looking to balance their book minute to minute, hour to hour, or even day to day is generally an oversimplification.

Let’s assume two bookmakers want to offer odds on a coin flip. They both recognise the true probability is 50% for heads and 50% for tails. One wants a 5% margin, the other a 2% margin. They set their odds at 1.90 and 1.96 respectively.

One hundred square bettors decide to make an equal sized bet. They don’t know the true probability and therefore the outcome they end up backing is assumed to be random (50:50). To get an idea what this looks like from the bookmaker’s perspective I simulated this situation 5,000 times for each bookmaker.

Their range of positions before the coin is flipped can be visualised in the chart below. The 2% margin book is on the left, 5% on the right. A bookmaker’s potential position can be read vertically. For example, after laying 100 bets, the most extreme position for the 2% margin bookmaker was -33.3% if the coin landed Heads, or +37.3% if it landed Tails. This position occurs when the split of wagers is 68:32.

At the bookmaker with 5% margin, their book was balanced in 37% of the simulations. At the 2% margin book this was just 15%. How does this balanced book percentage look after 500, 1,000 or 5,000 bets?

As we would expect, the more bets that a bookmaker can lay, the more likely they are to balance their book. We can see how much more difficult it is for a low margin book (even knowing the true probability and without any sharps in the market) to balance their book on a given market.

Exploiting bettor biases

Let’s now assume the 2% margin bookmaker has some information regarding the betting preferences of its client base, and predicts that there is a 60% likelihood that a bettor will back Heads. Where should they price the market?

Let’s continue assuming there are no sharps in the market. If the bookmaker holds the odds at heads 1.96 and tails at 1.96, their expected return remains constant at +1.96%. However, the possibility that they balance their book disappears if they lay any more than around 100 bets. Here’s what their range of positions would look like after 5,000 bets. The chart represents 5,000 simulations. Tails is, of course, the preferred outcome for the bookmaker.

In this scenario, the bookmaker has priced the odds efficiently but won’t balance their book because of bettor ‘irrationality’. If the bookmaker wants to maximise its likelihood of balancing its book, they would price the market off the predicted proportion of wagers. With a 2% margin distributed proportionally this would be somewhere around heads at 1.63 and tails at 2.45. If they lay 5,000 bets at these odds, their range of positions will look like this.

The bookmaker has increased their chance of balancing their book to 84%, while their expected return remains the same at +1.96%. We can see how a bookmaker who only takes bets from squares will be incentivised to offer inefficient odds, more closely reflecting their client’s irrationalities than the true probability. By operating in this way, they obtain the benefit of lower variance without having to sacrifice expected return.

Where they decide to price the market depends on their risk appetite. Continuing the example above, bookmaker expected return is plotted for different odds implied probabilities in the chart below.

How To Be A Bookmaker Website

The expected return will be highest when the odds are set at the implied probability midpoint between the true probability (50% here) and the predicted proportion of wagers on that outcome (60%). The bookmaker can maximise their expected return by setting the odds for heads at 1.78 (55% implied probability). What does variance look like with a market of heads priced at 1.78 and odds of 2.18 for tails?

How To Be A Bookmaker Online

This example shows that the incentive will always exist to shorten the odds for an outcome that a soft bookmaker believes will attract an inefficiently high proportion of wagers.

Next let’s consider what happens to the likelihood of balancing a book if the bookmaker sets odds efficiently and either ignores or doesn’t identify a bias in their clients’ preferences. Assume they set efficient odds (1.96 for both heads and tails) but the likelihood that a bettor bets on heads is unknown. In the chart below I have plotted this percentage over the range from 45% to 55%.

If proportion of bets laid strays slightly from the true implied probability (50%), the likelihood of balancing the book diminishes rapidly. For example, if a bookmaker lays 1,000 bets and the likelihood of laying a bet on heads is 46%, their chance of a balanced book reduces from 45% (at 50% likelihood of laying heads) to just 3%.

We can begin to see how challenging it is for a low margin bookmaker to balance their book in any given market. As the odds move away from even money this task only becomes more difficult.

Bookmaking in a nutshell

This analysis was predicated on a few strict assumptions, namely knowledge of the true probability, an accurate assessment of bettor preferences and a lack of sharp punters. Relaxing these assumptions will likely make book balancing even more difficult.

• Read: Do you know how difficult betting is?

In reality, a bookmaker won’t know the true probability, bettors will bet differing amounts, and at Pinnacle, sharps will attempt to punish what they believe are inefficient odds. The addition of sharps will limit a bookmaker’s ability to exploit squares by offering odds that differ from their estimate of true probability.

Whether they ultimately set odds that diverge from what they believe to be ‘efficient’ will depend on a number of factors. These include the relative risk appetites of the bookmaker and the sharps, the proportion of square to sharp money, as well as the timing of each groups’ participation in the market.

This is bookmaking in a nutshell - a cat and mouse game of quantifying uncertainty, predicting bettor behaviour, and managing variance over time. On the one hand, nuanced and multifaceted, on the other, simple and predictable.

The two most important activities that you should do when learning on how to become a bookie are learning how to acquire players and signing up with a pay per head service like Realbookies.com to take your players’ bets automatically with our betting software.

If you are in college and thinking about becoming a bookie, click here to see how a student took bets to pay off his college debts

The bottom line in bookmaking business is:

The more action you write, the more money you make. You will always want to add what you believe are solid players, not only to expand your business, but also to replace those customers who have proven to be bad debt or simply have been worn down by the house advantage.

Understanding that the customer who wagers only $100 a game will lose $3,000 to $4,000 over the course of any given season should give you plenty of incentive to hit the bricks. If you use your time wisely, reaching a customer base of 200 or so (a little better than average) should be no problem.

Getting new players is not as simple as advertising in the newspaper or sticking fliers on the windshields of cars when becoming a bookie. Nor can you just go out to the backyard, shake the customer tree, and watch them start falling to the ground.

Steps to become a bookie:

1. Learn about the business from blogs and experienced people
2. Find players
3. Partner with another bookie so that you both win
4. Get a great Pay Per Head Bookie Software
5. Start running and managing your business

What you have on your side, however, is word of mouth.

“I won $3,000 from my bookie this weekend, and he paid me in full at 10:00 A.M. Tuesday.” If enough co-workers and room mates and drinking buddies hear that, they are sure to say, “Hey, you think you could get me on with your bookie?”

The best thing you can do to expand your client list is continue to treat the customers you already have with respect, courtesy, and professionalism-and to always pay in full, on time, and in cash.

People like to talk, especially when they just spent their lunch break picking up a sack of money, and if all the talk about you is similar to that above, you will have no problems adding new players.

What if you are starting out with no customers? There are still ways to maximize returns on your efforts. The first step to becoming a bookie is to understand the basic truth that gamblers know other gamblers.

Think back to the first time you talked to a bookmaker. Didn’t you know somebody who was gambling and he set you up’? Or were you in the employee break room when one of your co-workers had a sports page out and was checking the lines? Nothing has changed since that time, except that gambling has become more popular than ever.

Should you open shop?

If you are considering opening your own sportsbook operation, odds are you know people who gamble on sports. Some of them are probably looking for a new outlet to wager. I always told potential customers who already had a bookie that if they would try me just one weekend, they would never go back to their previous bookie, and in the 8 1/2 years I was in the business, none ever did.

If you follow the guidelines on this page and conduct your business based on the information here, you will create many ex-customers for other bookies around your city.

You can start a football season with as few as 10 customers, and by the time bowl season has arrived, word of mouth recommendation should swell your pay sheet to 50 or 60.

At that level, even if the customers are small time, you should be employing an office clerk and a fax clerk while still leaving yourself a profit of $100,000 or so for six months of semi-work. Another way to increase customers as a bookie is to spend your leisure time where gamblers spend their leisure time.

But… Is It legal?

Here is a list for places where land-based Sportsbooks are legal. Also, remember that some states have started to loosen up regulations as well.

• Aruba
• Australia
• Bahamas
• Belgium
• Canada
• China
• Costa Rica
• Dominican Republic
• Ecuador
• France
• Guatemala
• Honduras
• Hong Kong
• Indonesia
• Ireland
• Italy
• Japan
• Macau
• Malaysia
• Mexico
• Netherlands
• Nicaragua
• Panama
• Portugal
• Spain
• South Korea
• Switzerland
• Taiwan
• Thailand
• US
• Turkey
• UK
• United Arab Emirates

Basic truth number two:

Golfers love to gamble.

Whether it is a $1-a-hole or $500-for-closest-to-the-pin wager, money changes hands when buddies get together on the links. Visit a golf warehouse or discount store, and the clerk there should be able to provide you with the names of several local private clubs you can join.

Many have stipulations that you have to be sponsored by a current member of the club, but some don’t. Find one where the membership fee is only $1,000 or so, plus monthly dues, and join. Besides improving your golf game (never a bad thing), being a member of the club will allow you to meet the other members of the club. Whether it is on the fairway or in the clubhouse, most of these men will enjoy a friendly wager from time to time.

You should be discreet when divulging how you make your living, but a cell phone call from a cart while the other three are deciding which club to use will start the conversation. Being proficient at spades, hearts, gin, etc., will also provide you the chance to meet other gamblers at the club.

Many older gentlemen go to the club every day to do nothing other than sit in the pro shop or locker room playing poker for eight or ten hours. Be friendly, be discreet, and, before long, you will be taking action.

The same basic truth (loving to gamble) applies to most guys who play tennis, but many actually participate in that sport for health benefits, and that is not our focus here.

BARS

Looking for more customers? Select a few bars in different parts of your city and become a regular. This does not mean you also become an alcoholic, as ginger ale or cranberry juice is usually what I order. (Trust me when I say that getting a DUI is not a fun thing, and it is even less so when the arresting officer sees that you have a hundred copies of the official betting schedule in your backseat. That’s what law enforcement refers to as a “clue.” But back to bars.)

When we say select a few “bars,” I am not talking about a T.G.I. Fridays or Chilis. I am talking about real bars. You know, the kind where when you walk in you can’t see anything for a minute or two until your eyes adjust. Real bars don’t have 143 televisions. They usually have one above the bar and one in the back room where the card tables are.

Find a few establishments like this and you have also just found a couple more customers. Go in, sit at the bar, and begin watching television. When you curse a basketball player for missing a free throw when his team is up by 17, the gamblers in the joint will know why you are upset. Most likely, they will be the ones to bring up sports wagering. “Who ya’ got?” is a common opener. When you reply, “I’ve got something on every team,” the conversation is started, and pretty soon you have another reason to visit the bar.

Partnering With Another Bookie

Probably the best way to get a lot of customers on your ledger in one motion is an arrangement where another bookie becomes a “sub-book” to you. It works like this:

Almost without exception, small to mid-size bookies will shut down after the NCAA basketball tournament is over and not reopen until football season starts in August. You should have no problem finding a player who, toward the end of basketball season, is looking for a new place to play so that he can bet on baseball.

The truly amateur bookie will think only of adding one new customer and, while taking on the new guy, will promise not to tell his regular bookie that he has gone somewhere else. What you should be doing in situations like this is not only have him tell his regular bookie about you, but ask that he put you in touch with his regular bookie.

At this point, you can present a no-risk offer to the bookie who is planning to stop taking action for a while. What you propose is that he tell all his current customers that he will be shutting down for baseball, but that if any of them want to get action on the games, he can recommend someone who is staying open.

Explain to the bookie that you will keep a separate record of whatever money, as a group, his customers wind tip collecting as a net winner or paying as a net loser. If they finish the season on the plus side (they won’t), you will pay out every penny. If they finish the season on the negative side (they will), you and he will split the profits 50-50.

All he has to do is meet with you each Tuesday morning to get the figures and then go pay or collect from the guys he put on. It will cost him nothing. He will have to do almost no work. He will make money.

Make sure the bookie realizes that in no way are you trying to snake his customers, just make money for both of you. He is planning on being closed anyway and, if he does it his way, he makes zero dollars for the summer.

Do it your way and he makes many dollars for the summer. Abiding by that agreement will, at the very least, be a money maker for a few months for you and the other bookie (now a “sub-book” to you). What normally happens is the bookie (a lazy creature by nature) will realize that he made a bucket of money for working one day a week, and when August creeps over the hill, will suggest that you two continue the arrangement.

Do this once a year and you will be extremely wealthy. You know the best part of this deal? With the extra money you get from this sub-book’s customers, you will be able to more than pay for another clerk, and now you won’t be working every day, either.

Becoming a member of a VFW or Eagle’s lodge or similar organization is another fantastic way to grow your bookie business. I had been a bookie for seven years when I joined one just north of Atlanta, and within two days, they had taught me new ways to gamble on sports. The bartender was the guy at the lodge who organized all the betting there, and he was confused by it, more than anything else.

He was happy when someone came along offering to help. “Helping” quickly turned into I had 53 new customers as a result of paying my $200 initiation fee. Besides being served semi-warm beer and having to listen to much more Hank Jr. than I ever knew existed, there was little downside to it.

Finally, I have acquired customers in a variety of other ways. Bookies have died, gone semi-legit, gotten married, gotten scared, or gone to jail (nongambling-related charge).

Hell, one buddy of mine decided that having to work three hours a day was just too much for him. For whatever the reason, if you can beat the bushes and open with even 10 or 12 guys, you will have 50 before you know it.

At that point, you are making a decent enough chunk of change to hire a clerk to work with your pay per head software service. You can then justify making him work all the shifts by himself, as you are out “recruiting new customers”.

Once you have built up a list, the next move is to acquire the correct software to automate taking the bets and the other every stuff that comes with being a bookie. For that please read on the best sportsbook software to use and the advantages of using a PPH service like RealBookies

If you are a beginer, right now you are wondering where to start acquiring the knowledge that will allow you to thrive in the Bookie Business, start with the Bookmaking Essentials course at Bookie Academy.

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