What is a Bookmaker?

A bookmaker is an organisation or individual that takes bets, usually on professional sporting events like football or horse racing, but increasingly on what is known as novelty events like Eurovision or elections.

The basic premise is as follows. The bookmaker offers the punter a price in the form of odds on an event to happen. For example England to win a football match at 10-1 (11.0 in decimal format). The odds are the price that the bookmaker will pay out in the event that England win the game. In this example it is 10X your stake. If you bet £10 on England to win you would receive £100 in winnings as well as your £10 stake back.

If England didn’t win the game, you would  lose your  £10 stake.

How do Bookmakers Make A Profit?

Bookmakers create what is known as an overround. An overround will lock in a profit regardless of the result, assuming that bets are equally placed across all outcomes. Let’s look at an example of this in practice.

Here is a tennis match on Bet365

You can see that the odds for Jana Cepelova are 1.9 - So if you staked £10 on Jana to win, you would get  £9 back plus your £10 stake, if she won.

The odds for Garbine Muguruza are also 19 - So if you staked £10 on Gabrine to win you would also get £9 back plus your £10 stake if she won.

From the above example you can see that if either player wins, you end up losing £1 and this is the overround.

Now in the example above, the bookmaker assumes that there is a 50% chance of either player winning the game. They are also hoping that they will get an equal proportion of bets on either player. If they get more bets for one player over another, they will reduce the odds, and thus the amount they would need to payout if that player won.

How is a Bookmaker Different From a Betting Exchange?

With bookmakers you can only place bets, what’s known as backing. With a betting exchange, as well as backing, you can also take bets from other punters, known as laying. Betting exchanges essentially match people together that want to back and lay events, where the odds are determined by the market and supply and demand, rather than an individual or a trading team, as is the case with a bookmaker.

Useful Links

• What is a Back Bet?
• What is a Lay Bet?
• What is a Betting Exchange?

How Can You Profit From Bookmakers?

If you are straight betting, you need to look for opportunities where you think that bookmakers have priced events too high. If you pick these correctly more often than you get them wrong you will make a profit over the long term. This requires a lot of knowledge and understanding of the sports that you bet on.

Another way is to take advantage of bookmaker sign up offers and reload bonuses, and lay them off at the exchange. This is what’s known as matched betting. Matched betting is much more accessible and less time consuming than studying form and individuals can make up to £1000 per month risk free. It has become much easier and faster in recent years with the introduction of matched betting software and calculators.

Read our matched betting guide, for more information on how to get started.