How do Sports Betting Companies Make Money

Those days are gone when gambling was prohibited all around the globe. People bet on games regardless of the strict laws implemented by the governments. So, one can say that gambling was always a part of our societies.

In the 21st century, many countries legalize gambling, which opens great opportunities for the people attached to the gambling industry. In this scenario, almost all sports betting companies make money and take part in growing the economies of their respective countries and states. Today, our topic of discussion is also how do online sports betting companies make money. So, keep reading to get the benefit.

The Terms Involve for Sports Betting Companies to Make Money

Fundamental Principle of Betting

The basic rule of bookmarking companies is very simple and straightforward. Companies collect money from bettors on some odds and then pay them back on winning the bet. To earn a profit, betting companies take more money than they pay the customers.

Charge Fee as Vigorish

The betting company will make a profit whenever you bet on a game, either you win or lose. You can say the company charges a fee to facilitate the bet, the same as an agent charging money as a commission for assistance with the visa process.

It isn’t easy to win all the bets for a beginner as well as a seasoned bettor. They play well over time after attaining an excellent experience. But there is no space for loss when we talk about betting companies. They hire qualified mathematicians and statisticians who set the formulas to generate a specific profit for the company after every bet.

Now, we try to understand the term vigorish with the help of an example. Suppose you bet $11 for a match with odds of -110 for both sides. On winning the bet, you will get $21 instead of $22. The remaining $1 has been kept by the betting company as a vigorish.

Furthermore, the amount of vigorish will vary, depending on the odds. If the odds of both sides are different, it will not be easy to find vig. In such cases, you can calculate it by using the formula:

Vig = 100 * (1 – p * q / p + q)

Here, p and q describe the decimal payout for each bet result.

Duty of Odds Compilers

Setting odds wisely will result in a massive profit for betting companies. For this, these companies hire some odds compilers, experts in specific sports. They have to set the odds such that the company earns profit, no matter what the game’s outcome.

Odds compilers set the pricing after keen observation of many factors. Based on these factors, the company decides the odds for both sides. Some essential factors are listed below.

  • Weather of venue
  • Identify the injury of key players
  • Current performance of the team as a whole or any individual player
  • Results of recent matches of the teams involved

Role of Balance Book

When a betting company has a balance book, it will make the same amount of money that is set by the bookmaker, regardless of the outcome. On the other hand, in the case of an imbalance book, it results in loss. So, the bookmaker should be experienced and knowledgeable about the changes in sports with time. Their odds play a vital role in growing the business of betting companies.


This guide will help you understand how sports betting companies make money using different mathematical and statistical algorithms. Through these algorithms, they make sure to get a profit after each bet.

If you’re a bettor, then it is advised to understand the algorithm followed by the betting companies. This article will also assist you in this regard. These guidelines are enough for anyone to increase the ratio to win the bets.

Still, if you have any question, you can ask them anytime in the comment section. We have a support team, which is active 24/7 for addressing any issues our clients face. So, ask whatever without hesitation. It will be a great pleasure for us to resolve your issue. Keep enjoying.

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