How do sports betting sites make money?

Now the question is, how sportsbooks make money? Many of the new bettors think that sport betting is something that can be beaten with a bit of sports knowledge. But, it’s not that easy as it seems. Bookmakers are actually your rival, and you have to understand first how to beat them. The best online sports betting sites make money on betting by collecting a commission on the bettors losing bets.

Football is one of the best sports to bet on and bookmakers are like other businesses and they exist to make profits. They are always one step ahead of the gambler. The bettors can’t make money if they are willing to take bets on both sides of the game. But the bookies can make money from being on the right side. The profit to the bookies comes from what they ask you to bet while you place a bet. They make money by accepting bets on the marketplace and pricing it in such a way that it doesn’t represent the true probability of the total outcome. This margin between the bets gives bookies an edge over the bettors. They set lines to ensure the profit.

Let’s understand it with an example:
The The most common betting odds are 11 to 10 which are represented by the +110 money line. If you are new to betting then you may assume that you can bet $100 to win $100 on any team but this is not the case. If the bettor wants to win $100, then he is risking an amount of $110. The amounts may change but the ratio will be the same.

You are required to pay $110 while placing a bet online on your team at a betting site. If your team wins, then you will collect $210 cash and if your team loses, you will lose your initial $110 investment.

Here’s how this maths works how it is beneficial for the sportsbooks:
50 people bet online on a soccer game and 25 of them take the home team and the other 25 take the away team. Assume that the average bet amount on each side is $110 which means the bookmaker will collect $110 x 50(people) = $5500.

If the home team wins, the winners will get their initial amount i.e. $110 back which is equal to $ 110x25= $2750
The winners also win $100x25 = $2500
Winners will get $110+$100 = $210 each
The payouts by bookies are $5250 and the collected amount was $5500 which means they are making a margin profit of $250 from a single match no matter which team wins or losses.
The extra $10 that the bettor is risking on his bet is the commission of the bookies which is also called as “the vig”.

Not all bets use the same $110 to win $100 ratio and in some books, this ratio is even worse i.e. it may be $120 to win $100 or it could be $105 for $100 in some cases. The business model of sportsbooks is ingenious and highly profitable too. The best online sports betting sites deal with hundreds of thousands of dollars per game. In national football leagues, there are 14 or 15 matches per week where $250 starts to add up to their profits faster.

Of course, the sportsbooks need to be well aware as anything can happen. In some cases, they might need extra funds to compensate for the amount.