Learn How Online Bookmakers Work
Updated: April 2024

Learn how online bookmarkers work along with lines and knowing the vig.

In order to understand how you can make money on your sports betting wagers, first you need to understand how online sportsbooks bookmakers work. The two are in a very close correlation, don’t be caught up in the appearances, and don’t be lazy to delve deeper into the matter either.

Under normal circumstances, the bookie makes his money on the vig. The vig is just like the poker rake, only here you will never get any rake back. You place a $1 bet on one side of a matchup, another guy places a $1 bet on the other side, one of you loses so the bookie pays the winner out with what the loser dropped and retains the vig. You end up getting paid $0.98 plus the dollar you wagered. The 2 missing cents are the vig. This is a very simplistic representation of how the online sportsbook bookmaker earns money on the match ups it features.

In order for this model to work, the bookmaker has to make sure that both sides of a particular match-up get an equal number of bettors. This is where his big challenge lies. It may be simple enough to balance a bet with 2 guys wagering on it, but when thousands of people, each with their own ideas about the outcome, each with their own handicapping and picks flood the equation, the problem becomes infinitely more intricate. One of the ways the USA sportsbooks online bookmaker can “tell” those people which side of the bet to flock to, is by adjusting his lines.

That will create value on one side or the other, enticing people to get their money in on the side with the value. At the end of the day, all the bookie has to do is to balance the whole thing approximately as he’ll be able to cover unbalanced bets from the vig taken. It is quite obvious that the better the balancing job that he does, the more vig he’ll be able to scoop up.

Why should all this interest you? Because as you can plainly see from the above rant, the bookmaker’s best interest is to provide an absolutely even, 50-50 coin toss of a bet. That means if you head into this whole thing heedlessly, you’ll actually wager money on a coin-toss, which would be a 0 mathematical expectation bet were it not for the vig, which nudges the whole thing into –EV land. In layman terms: you’ll be betting on a losing proposition, no matter what you do.

I did say however that the bookie is sometimes forced by crowd pressure to shift his lines off the 50-50 setup. Well, that’s exactly where your value is. Let’s see an example in this sense.

We’re all pretty much in the clear about how the crowd loves a favorite playing on the road. Yeas sir, squares love’em so much they don’t even care if the underdog they’re facing is actually a rather potent one. To show their love and support for the fav, and also to make sure they win their bets, they’ll get massive money on that side of the match-up. That’s what the bookie calls “square money” rushing in. Little do these squares know (and little do they care) that statistically speaking, such match-ups are quite evenly distributed between the favs and the dogs SU, let alone ATS. ATS, the underdog is actually a slight favorite.

All that square money coming into the deal though upsets the balance, and creates a huge deficit on the underdog’s side which spurs to bookie to action. He’ll do one of two things: he’ll either decide that the value on the dog’s side is too obvious, and he’ll go up against the squares himself covering their bets with his own money, or he’ll begin shifting the lines to balance the whole shebang.

Now then, the first of those two options doesn’t give you any value. It is a pretty risky move for the bookie too, and while he can win a whole lot on it, he may also end up suffering a huge blow which is obviously the last thing he wants.

Bookmakers do not make their money by gambling, so such a setup might be a too risky one for them to get involved in. If he decides to opt for the second choice, he’ll move his lines to offer obvious value for those who bet on the dog. That is where you being the savvy bettor that you are, leap into action. If you bet on the dog under such circumstances, the lines that you get are no longer 50-50 ones, heck, in most cases they’ll even offset the drag produced by the vig.

That’s one example why you need to be perfectly aware of what the online sportsbook bookmaker’s actions mean. If you find all this too complicated, just hammer one thing into your mind: a sport betting is a lot like the stock exchange: you won’t make money buying something when it’s soaring high.