Essential Bookmaking Technique – Setting The Odds
It’s totally possible to consistently make a profit on bookmaking business if you know the right technique. The secret here is that bookies include the Margin (Juice or Vig.) in their favor while setting the odds. This is how they make sure that they are always at advantage no matter the result of the games. Although bookies can’t control the results of sports events, they can control how much they could win or lose on any particular outcome. Let us plainly explain this essential bookmaking technique to you about why setting the odds makes so much difference.
What does Margin/Juice/Vig. mean?
It is the underlying percentage of fee that bookmakers added for charging on any accepting bets from their players.
Even money: (No Margin)
This suggests 2.00 in Decimal odds, +100 in American odds, and 1/1 in Fractional odds. Let’s use teams Lion and Tiger as examples to illustrate two possible outcomes of the event. If there are 100 successful bets of $100 from each player, 50 of them bet on Lion and another 50 on Tiger. Then the bookie won’t be able to make any profit in this case.
Team Lion 50 payouts x $200 = $10,000
50 bets x $100 = $500 if Lion wins (Profit: 0)
→ Bookie receives $10,000 →
Team Tiger 50 payouts x $200 = $10,000
50 bets x $100 = $500 if Tiger wins (Profit: 0)
($200 = $100 Original Stake + $100 Profit)
As you can see the example above, the bookie received $10,000 in total from those 100 bets, but he/she had to pay out $10,000 to the winning players whichever the result. It makes no profit for the business that is definitely not an ideal scenario you may want to face.
Normally there should be a portion of margin calculated to be charged in odds to make the profit. Let’s use the example to show you how the margin makes the difference. In case we set the Decimal odds as 1.8, -125 in American odds, and 4/5 in Fractional odds:
Team Lion 50 payouts x $180 = $9000
50 bets x $100 = $5000 if Lion wins (Profit: 1000)
→ Bookie receives $10,000 →
Team Tiger 50 payouts x $180 = $9000
50 bets x $100 = $5000 if Tiger wins (Profit: 1000)
($180 = $100 Original Stake + $80 Profit)
As a result, the bookie had to pay out $9000 against the $10,000 he/she received in total bets from the players. It means the extra $1000 is the earned profit which is equal to 10% of juice that the bookie charged from the bets. Now you can see the change in odds could make such a big difference for guaranteeing the advantage on bookmaking.
These were just some simple examples to show you the basic knowledge about the odds setting. In the betting markets, there could be more than 2 possible outcomes for the sports events and things can become more complicated than usual. That’s how our Pay Per Head line managers make the important role to help you set the odds correctly according to the current market trends.