Bookmakers come in all shapes and sizes, from bookies that bet on-course, to the little village bookmaker that has one betting shop, to the bookmaking giants such as Ladbrokes, Corals, and William Hill.
In our article, how much profit do bookies make, we’ll explain how bookmakers make a profit from punters that bet on sports and casino games. We’ll also hit you with a few figures of just how much money some of the bookmaking giants make in a typical year.
How Do Bookmakers Make A Profit From Sports Betting?
Bookmakers make a profit by tilting the odds in their favour, by which we mean they bet to overround percentages on most sporting events.
The easiest way to explain an overround book is in a typical example of a tennis match between two evenly matched tennis players. In theory, if both players have an identical chance of winning the match, they would both be priced up at odds of even-money (2.0).
But bookmakers don’t offer even-money on both players, instead, they offer 10/11 (1.91) about both players winning.
If the bookmaker then takes bets totalling the same amount of money on each player, they are guaranteed to make a profit on the event.
If the bookmaker takes £10,000 on each player, they will have a turnover of £20,000 on the market. But they’ll pay out less than £20,000, no matter what the result. Betting to overround percentages like this is how bookmakers make a profit.
To prove this:
If Player-A wins, the bookmaker will pay out £10,000 at 1.91 = £9,100 + £10,000 stakes = a profit of £900.
If Player-B wins, the bookmaker will pay out £10,000 at 1.91 = £9,100 + £10,000 stakes = a profit of £900.
So, from a turnover of £20,000, the bookmaker has made a profit of £900 or a 4.5% profit.
Of course, the demand and supply of betting markets means that bookmakers rarely have a balanced book on every event. But whether they bet overround on a 3-way football match, a 20-runner horse race, or 156-runner golf tournament, the overround percentages they bet to mean the odds are always in their favour.
How Do Bookies Make A Profit From Casino Games?
If you’re playing casino games at online betting sites or land-based casinos, it’s important that you understand that bookies also stack the odds in their favour. If you’re playing online slots, each game has something known as an RTP, which is the Return to Player.
An RTP is how much the machine typically pays out on every £100 bet on it, and RTP’s typically vary between 93% and 97%. If you’re playing a slot with an RTP of 93%, that means that the bookie only pays out £93 out of every £100 bet. If you’re playing a slot with an RTP of 97%, that means that the bookie only pays out £97 out of every £100 bet.
But these are only the average payouts. These games can pay out big wins, so that means there are often long spells in which hardly any money is paid out.
Casino games such as roulette are slightly different, as these games are designed to give the bookies a house edge. A European roulette wheel has numbers 1-36 on it, for which you get odds of 35/1 for predicting a correct number. That would be fair, but there’s also a zero, which gives the bookies a house edge of 2.7%. This means for every £100 bet, the bookie typically pays out £97.30.
How Do Bookies Justify Betting Overround, RTPs, And House Edges?
Bookmakers are in business to make a profit, which is why they bet overround on sports, have slots with RTPs, and have a house edge on casino games. They also need to cover a wide variety of expenses, such as business rates and wages.
Many punters are happy to bet against the odds to enjoy the fun of betting, while professional gamblers make it their job to beat the odds, even though they’re not in their favour to begin with.
So, How Much Profit Do Bookies Make?
As we’ve already mentioned, bookmakers come in a variety of shapes and sizes, but they all work to similar overround percentages on sports betting, offer slots with RTPs, and casino games with house edges to try and make a profit.
Many of the big bookmakers are owned by shareholders, so their profits are published each year. For example, Ladbrokes and Coral are both owned by a company called Entain, which published profits of £175 million in 2020 from a turnover of £3.6 billion.
Flutter is another umbrella company that owns a variety of big bookmakers, including Betfair and Paddy Power. In 2020, Flutter’s total revenue was £5.2 billion, with profits on turnover being £432 million.
Of the big bookmakers, William Hill suffered most in 2020, returning a profit of just £61 million from a turnover of 1.6 billion.
How Do You Beat The Bookies?
If you want to beat the bookies, it’s time to get serious about your betting. Playing slots and casino games may be fun, but you now know that the RTP’s on slots and the house edge on casino games make it difficult to make a profit from games that are programmed to take your money off you in the long run.
True, you could be one of those punters that’s lucky enough to win a jackpot, but you might as well play the lottery if that’s what you’re trying to do.
But while bookmakers also bet overround on sports events, professional gamblers have shown that it’s still possible to make a profit from betting by being shrewd.
Professional gamblers aren’t looking to get rich quick by landing jackpots or even massive-priced accumulators. Instead, professional gamblers use their vast knowledge about a sport or sports to find value bets that allow them to make long-term profits from gambling, just like earning a wage.
Value in betting is when you think you can get odds about a selection that are bigger than what you consider the real probability is of that selection winning. For example, if you think a selection has a 33% chance of winning, you’d be delighted to bet on that outcome at odds of 4/1.
What you need to remember in sports betting is that the odds offered by a bookie are just an opinion and, if your opinion of the true odds of a selection winning is consistently more accurate, you’ll constantly find value bets.
If you’re not good at finding value bets or picking winners, but still want to make long-term profits from gambling, following the advice of professional sports tipsters is something you may wish to consider.
We hope that’s answered your question, how much profit do bookies make.