Want to learn to bet? Betting 101 is the place to start and today’s lesson is about the Bookmaker.
So how does the bookie make money? He takes a cut.
Let’s go back to our coin toss example. Let’s say you and your mate have the same bet, but this time you employ a bookmaker to take and hold the money until the coin is tossed.
Unfortunately for us punters, a bookie won’t do that job for free!
What the bookie does is increase the percentage on each selection, to include an amount for himself in the market.
Where the raw market had both the heads and tails at 50% each – $2.00 – the bookie may increase this to say, 54% each.
1 / 54% = $1.85.
That’s the odds for either a head or a tail. You and your mate put in your $10 each, but now the winner only gets paid out at $18.50. The bookie takes the $1.50 difference for himself: that’s his cut..
The total market percentage is now 108%: 54% + 54%. If the bookie wishes to take a bigger cut, he may increase the market percentage more. You’ll notice that each time the market percentage increases, odds decrease, meaning the winning punters get less and the bookie gets more.
Let’s look at a hypothetical horse race for a more involved example. It’s a much bigger market, but the principles are exactly the same. Here, the bookie has set the market at 119.5%.
|1. So You Think||21%||$4.80|
|4. Might And Power||2%||$50.00|
|6. Makybe Diva||21%||$4.80|
|8. Better Loosen Up||1.5%||$67.00|