As sports bettors, we have a huge choice of platforms to choose from. But that raises an important question. With so many bets across the mass of sportsbooks, how are these platforms making enough money to stay in business? Furthermore, where do your winnings come from? Let’s take a look.
When bookmakers create betting lines, the idea is to make bettors place wagers on both sides of the event. They’re looking for these bets to be as even as possible. So, if the same number of people are backing Team A and Team B, how can a sportsbook break even?
This is due to the “vig” (also known as “the take” or “the cut”) that is attached to every single bet. This could be considered a sort of fee the bookmaker charges a bettor for placing their wager. The vig is most noticeable in point spread betting. Let’s look at an example.
It’s common to see spread betting for NFL games look something like this:
The -110 means that a sports bettor would have to wager $1.10 for every $1.00 they want to win. So, if you were to wager $110 on the Houston Texans, and they won, you’d get a profit of $100 on top. If that were an even odds bet, you take home a profit of $110 on your $110 bet, a total of $210.
Wait a minute. What happens to the other $10? That’s the vig. Even if you win, the sportsbook takes their cut. That’s how they make their money.
Betting lines used to be consistent across all reputable sportsbooks. With the rise of so many online sportsbooks, things have changed. It’s all to stay competitive.
This lack of consistency is a result of platforms trying to outdo one another in a bid to provide the most appealing odds. A sportsbook with better odds could potentially draw in more bettors. In turn, more bets means more money for the sportsbook.
It’s a simple fact: sportsbooks need money to stay open. Without the vig, sports betting sites wouldn’t have the financial resources needed to stay in operation.
Just make sure you look at the betting lines before you place a bet. It’s all about the margins.
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