The Facts About Bookmakers: Do Bookies Lose Money?

It’s a saying as old as time: “the house always wins.”

In many cases, this is true. Online casinos and sportsbooks have built-in fail-safes to make sure that they profit from the majority of betting encounters. But will a bookmaker truly always win when people place bets on their sportsbook?

Read on for a comprehensive answer to the question of whether or not bookies lose money.

How Much Can a Bookmaker Earn?

There’s no denying that bookmaking is a lucrative career path. You can make as much as you’re willing to put effort into earning. Bookie businesses are the epitome of “you get out of it what you put into it.”

This isn’t to say that smaller bookies can’t make a living. Even those who treat bookmaking as a side hustle can make a pretty good living of $26,000 or more annually. It pays the bills and can serve as a second job (since you won’t be putting too much time into it in these cases).

Want to make your bookie business a full-time job? There’s even more money that’s ripe for the picking.

Bookies that have 100 players or more can make about $100,000 in a single week. This comes out to about $5 million annually. There are few career paths that could provide you with a more lavish living.

This is in part because people tend to place large bets with online sportsbooks. It’s common for multiple people to bet $100 or more on a single game or event. When they continue to frequent your sportsbook and place bets, you’re going to turn a higher profit.

“House edge” is another reason that bookmakers run lucrative businesses. This term refers to the advantage that the bookie has in getting to set their own lines, selecting limits on certain players, and providing payout on their own terms. Bookies are the ones who set the conditions of betting, so they’re the ones who have the advantage.

Do Bookies Lose Money Sometimes?

However, this isn’t to say that bookies never lose money- they do.

Note that “losing money” doesn’t just happen because a random player wins a bet. In these situations, this loss will be offset by all of the other players whose bets you were able to pocket. “Losing money” takes place when your sportsbook does not gain enough to make up for that loss- in short, when you lose more than you make.

Poorly Managing Odds

In most cases, losing money is the result of house error. Sportsbooks make their earnings because they manage their odds well. When you project the odds appropriately and offer the right lines, it’s a done deal that you’ll make more than you lose.

However, in some situations, bookies don’t strategize well on how to get balanced odds. For example, if everyone chooses to bet on an underdog that you as the bookie need to pay more for, you may need to pay more than you gain if the underdogs win. This could lead to enormous losses that would be challenging to make up over time.

Some bookies find themselves in these bad situations because they fail to adjust the odds to maintain their house edge. They would need to give less value to the underdogs and make the projected winners more valuable to bet on. This would make bettors more likely to flock to the favorites since they now hold more value.

Paying Too Much for Sportsbook Services

Another way that bookmakers lose money is by poorly managing it. If you make $5000 after a specific game, you’re going to need to reallocate some of that money into maintaining and growing your bookie business.

This can get expensive if you’re using the wrong services. You don’t want to pay for security systems, a custom website, customer service, a mobile app interface, marketing, and everything else you need independently. This could easily cost over $5000.

It’s important that you invest in an all-inclusive pay-per-head (PPH) software when you’re beginning your bookie business. If you don’t, poor financial decisions (and the stress of making them) could drive you to the ground.

How Can You Avoid Losing Cash?

The best way to avoid losing is to invest in top-notch sports betting software. When you work with Ace Per Head, you won’t just have access to the best technology for running your sportsbook. You also will have access to round-the-clock bookie support services.

Plus, full control over lines, limits, players, and bets ensures that you can thrive. You can revise odds whenever you want and implement new lines. This ensures that you don’t fall prey to poorly-created odds assuming that you know how to set them appropriately.

You’ll be able to solve both common reasons that bookies lose money at once. Two birds, one stone!

You also can avoid losing money by setting the “vig” the right way. For those just learning new bookie facts, the “vig”- short for “vigorish”- is the sum that bookies take from each bet regardless of who wins. It’s their cut.

If two bettors place $100 bets on a game with -110 odds, you will give the winner a $90 profit. Because the odds are about equal, one player will likely win and get $90. The other will likely lose $100, which means that you as a bookie profit by at least $10.

Making sure that you appropriately figure out the vig is a way to stop yourself from losing money. It needs to have room for profit, reflect actual probabilities, and also be no higher than competitors. You want to entice gamblers while still making bank.

Keep Your Edge With Pay Per Head Software

While the prospect of losing money is scary for any new bookmaker, there are ways that you can keep your house edge and ensure that your sportsbook thrives. Now that you know how to reach your maximum earning potential as a bookie, it’s time to get started with the best pay-per-head software on the market.

Ace Per Head is committed to helping you grow your small sports betting business into an industry behemoth. Our experts don’t just help you create a custom website but also offer upgrades, security enhancements, and 24/7 advice. Sign up for your six-week free today and see exactly what we can do for your bookie startup.