How Do Sportsbooks Make Money

Sportsbooks make money. That’s why they stay in business. There is an inherent risk in taking any bet, but sportsbooks work to ensure they make a profit on every event they have on their board. How they make money may be foreign to inexperienced bettors.

Key Points

– Sportsbooks make money, or at least attempt to, on every single bet.

– Your choice of sportsbook can have an impact on your betting success.

How Sportsbooks Are Run

Sportsbooks are free to operate however they see fit. They are in business to make money, just like any other legitimate business. 

What’s interesting is what constitutes a winning bet varies depending on the sportsbook in question. When a push occurs against the spread, some facilities will refund your money. A push is when there is no winner or loser.

Some sportsbooks will consider a push on a parlay ticket as a loss. In order to avoid a significant loss and still draw action on both sides of the event, sportsbooks can set their own lines and odds and adjust them however much they want. 

Although sportsbooks strive to be distinctive, there are clear similarities among them. Moneyline, point spread, totals, parlays, teasers, game-specific prop bets, and future bets are all available at any bookmaker. However, from book to book, the juice or vig you’ll need to pay in order to profit varies.


Vig – One Way Sportsbooks Make Money

The inclusion of vigorish, aka “Vig,” is the primary strategy used by bookmakers to make a profit. The odds that bookmakers set are designed to help them turn a profit. Vig is essentially a commission for placing bets. Let’s examine a straightforward coin flip to better understand this concept.

Each of the two outcomes from a coin toss is equally likely. There is a 50/50 chance that the coin will land on its head or its tail. A bookmaker would offer even money on a coin toss if they were giving true odds. This translates to odds of +100.

When a $10 wager wins at even money, the result is $20. The winner gets his original $10 bet stake plus $10 in profit.

Let’s imagine that a bookmaker had 100 customers who each wagered $10 on the outcome of a coin toss, with 50% of them betting on heads and 50% on tails. In this case, the bookmaker would not stand to gain anything at all.

With the addition of a commission – the vig – sportsbooks make money. Using the same coin toss example, the odds on both sides of the wager are -110. A $10 wager now pays out $9.09. The sportsbook keeps the remaining $0.91. 

If this sportsbook took $1,000 in totals bets, they would pay out $954.50 to the winner. The remaining $45.50 is profit. 

Even though this is a very simplified illustration, it demonstrates how bookmakers manipulate odds to their advantage. When it comes to actual sporting events, things become a little more complicated because the outcomes are equally likely. 

Simply put, sportsbooks are protecting their bottom line by making every effort to ensure that there is equal action on both sides.

The Top Sportsbooks Make Money

The most well-known physical sportsbooks are in Las Vegas, Nevada. It’s one of the few places where they are legal. It can be extremely difficult to find a seat in these venues to watch games during occasions like the NFL Playoffs or March Madness.

Tourists flock to Sin City with the hopes of turning a profit of their own. The top sportsbooks in the industry – MGM, Westgate, Caesar’s Palace, and more – are all located there. 

With the expansion of sports betting today, online sportsbooks are becoming more and more common. These are sportsbooks that accept customers from all over the world but are physically located outside of the United States. 

These types of sportsbooks are found offshore, or outside of the US. The idea is essentially the same as a physical sportsbook, but everything is done online with a few clicks on a smartphone. The more well-known online sportsbooks include FanDuel, Bovada, and DraftKings.

How to Pick Your Ideal Sportsbook

Finding the ideal sportsbook is like finding the best of any product. You have to shop around. It’s like finding the best lines on your sports bets. 

Since sportsbooks offer different prices on the same bets, it might pay to have accounts at multiple sportsbooks. Learn more about that by clicking here. That way, you can ensure you always get the best line and odds on a bet.

Keep in mind that sportsbooks are free to set betting odds however they see fit. You might find the Chicago Cubs at -180 to beat the New York Mets at one sportsbook. At another, the exact same game has the Cubs listed at -190. A 10-cent difference isn’t huge, but over time it will add up.

Find a book that provides good returns on all bets. There are sportsbooks out there – offshore – that will offer reduced juice too. Offshore books aren’t tied down by a lot of regulation and taxes. They can pass on some of their savings to customers through better odds. 

Almost every sportsbook now offers bonuses and incentives for new and existing customers. Take advantage of those too.