PPH Bookmaking – How Does It Work

Bookmaking How Does It work

With lines that are the sharpest in the industry, brought to you a by a stage of 30 professionals working 24/7, 365 days a year, perheadnetwork.com is the leading choice for local bookies, professional credit bookmakers and sports betting agents. And if you are one of those that wonder about bookmaking and the whole process behind it let’s talk more in depth about it.

To keep it simple let’s use the classic example of tossing a coin. Let’s assume the Bookmaker has a perfectly balanced book with $100 stake on heads and $100 stake on tails ($200 total stake). This situation is ideal for the Bookmaker as they will always generate profit provided they offer odds less than 2.0 for both outcomes. If the Bookmaker offered 1.98 for both outcomes then one of the following two outcomes occurs:

Outcome 1: Heads Wins (50% real chance)

Heads: -$98 loss

Tails: +$100 win

Result = +$2 for the Bookmaker

Outcome 2: Tails Wins (50% real chance)

Heads: +$100 win for the bookie

Tails: -$98 loss for the bookie

Result = +$2 for the Bookmaker

No matter what result, the bookmaker is in profit. This is the simplest representation of Bookmaking, and it relies on balanced books to ensure that the profit is absolutely guaranteed.

Implied Probability & Calculating the Overround

The implied probability for both outcomes in the above example, according to the odds offered by the bookmaker is calculated by the following formula:

1 / (decimal odds) = 1 / 1.98 = 0.50505 = 50.51%

Using the implied odds we can calculate the over round, or “house edge”, by totaling the implied probabilities of all outcomes:

50.51% (for tails) + 50.51% (for heads) = 101.02%

Notice that for fair odds (where the Bookmaker offers 2.0 for both outcomes), the total of all outcomes is exactly 100.00%

Therefore 1.02% is the over round in our example. That is, for every 100 units paid out to bettors, the Bookmaker can expect to take 101.02 or 1.02% profit.

In our example we know the real fixed, fair probability of a heads occurring is 50%. With Horse Racing, or indeed any other sport, calculating the chance of winning is much more difficult and Bookies don’t always get it right. Indeed this can play into the hands of the Bettor as the sometimes the odds offered are above the fair odds for some selections.

As a final note: remember that Bookmakers don’t know the outcome of an event before it happens, nor do they always get it right. Bookmakers are merely just experts in offering odds at lower-than-fair-value odds. That’s their job, and effectively their “fee” for the service they provide.

Our complete management team has worked at 8 different online sportsbooks in 3 different countries to provide the largest sports betting offering in the industry, with over 80 leagues.This team has a combined experience on 4 different sportbook platforms and with even more casino and horse book suppliers.

Try our superior Pay Per Head Service? Sign Up Today and Get 2 Weeks Free.