• How Online Sportsbooks Make Money from Football Fans

    As many estimate the UK betting industry to be worth over £650 million, saying it’s big business is an understatement.

    Nearly half of that gigantic sum comes from wagers placed on football. With all the free bet deals, cashback on losses schemes, and other promotional devices available, you might wonder how online sportsbooks make so much money from football fans.

    Their business model is relatively simple:

    The Bookmakers’ Business Model

    As is the case with any viable business model, bookmakers must try and make more money than they pay out. But how can they do this when it’s impossible to predict betting outcomes?

    Although a bookie can’t control the final score of a football match, which horses will place in a race, or the game score of a tennis match, etc., they do have some control over how much they can make or lose from any outcome. They do this by placing a margin in the odds they offer you.

    It’s in the Odds

    Sportsbooks include a built-in profit margin in the odds for every single wager. If a bookmaker were to accept bets on heads or tails on a 50/50 coin toss, the bookie site wouldn’t offer you even odds, even though this is a true reflection of the probability, because this couldn’t ensure a profit. With these odds, if you bet £100, you could win £100, making it a 100% market.

    Sportsbooks will never offer you the odds based entirely on the probability of the outcome. Instead, they create an edge in their favour by pricing betting markets above 100%. This deviation of the price offered from the ‘true odds’ is the bookmaker's margin - also known as the ‘vigorish’ or ‘vig.’

    So, for a coin toss, bookmakers would offer heads or tails at odds below 1/1, meaning you would have to bet more than £100 to win £100. For instance, the sportsbook would likely offer you 91/100 - a margin of 4.7% - in this case, you would have to bet £110 to try and win £100. Adding this vig to this betting line means punters would lose 5p for every £1 wagered over time. This expected return ensures bookies will always make a profit.

    Bookmakers can also adjust the lines according to the amount of money wagered on each option to avoid huge losses. For this reason, odds on the Three Lions winning the World Cup are usually less favourable in England, as many bettors place action on their home team regardless of their chances of winning.

    Odds Compilers

    Every bookmaking firm uses odds compilers to set their betting lines. Their main goal is to ensure accuracy in reflecting the chances for every possible outcome while keeping the profit margin. They do this by thoroughly analysing stats and using sports knowledge offered by experts. Some of the areas an odds compiler will consider when determining results include:

    - Current form
    - Past performances with the same weather types
    - Outcomes of previous meetings
    - Injuries
    - Time of event

    Affiliate Marketing

    Individuals and businesses can also enter into business arrangements (affiliate agreements) with sports-betting and casino sites online - generating profits from gambling, sportsbook and casino affiliate programs - by sharing in the net gaming revenue (profits) generated by their referred customers.

    How Can Sportsbooks Make Money From Free Bets?

    Sportsbooks give you free bets to entice you to sign up with them, but it’s not out of the kindest of their own hearts. They know that the chances of you spending your cash to wager on sporting events are much higher after you’ve opened a new account. So, although they’ll make some initial losses, the profits made from bettors welcomed in with this promotional tool will far outweigh the initial investment.

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