Go Back

How Do Bookmakers Make Money & How Much Do They Make?

How Do Bookmakers Make Money & How Much Do They Make?

Welcome to another Daisy Slots blog post, where we're diving into the intriguing world of bookmakers and unravelling the secrets behind how they make money. 

Have you ever wondered how bookies turn a profit, the scale of their earnings, or if they ever face losses? Whether you're new to gambling or simply curious about its inner workings, we've got you covered. In this discussion, we'll explore the mechanisms bookmakers use to make money, quantify their profits, and shed light on the rare occasions they might not come out on top. 

Read on to learn more. 

How Do Bookies Make Money?

At the heart of it, bookies are businesses with the primary goal of making a profit to sustain their operations. But how exactly do they achieve this in the unpredictable world of betting

In this section, we'll break down the key strategies they employ, such as backing and laying bets, balancing the books, and the overround principle. 

Each of these strategies plays a vital role in the financial success of bookies. Let's explore how. 

Backing and Laying Bets

Backing and Laying Bets is a fundamental strategy bookies use to ensure they profit from the bets placed with them. When you "back" a bet, you're wagering on a particular outcome to happen, like betting on a team to win. Conversely, to "lay" a bet means the bookie is betting against that outcome. 

By offering both options, bookies can cover all possible outcomes of an event. This tactic allows them to collect a commission, known as the "vig" or "juice," on bets, ensuring they make money regardless of the event's result. This balancing act is key to a bookie's financial stability. 

Balancing the Books

Balancing the Books refers to the bookies' strategy of adjusting the odds they offer to ensure that they make a profit regardless of the outcome of an event. This process involves carefully managing the money wagered on all possible outcomes to achieve a balance. By doing so, bookies aim to minimise their risk. 

If they notice too much money is bet on one side, they'll adjust the odds to make the other options more attractive, encouraging bets that even out their liability across all outcomes. This meticulous balancing act helps ensure that the bookie comes out ahead, no matter who wins the event. 

The Overround Principle

The Overround Principle is a crucial concept in the world of bookmaking that helps ensure a profit for bookies, regardless of the event's outcome. Essentially, the overround is the practice of setting the total market odds in a way that the sum exceeds 100%. 

This mathematical formula means that for every pound wagered, the bookie expects to pay out less than one pound on average, thereby securing a margin for themselves. 

By carefully crafting the odds to include this overround, bookmakers can guarantee they keep a slice of the pie, making it a foundational principle in the economics of betting. This strategy is how bookies manage to stay profitable in the long run. 

How Profitable Are Bookies?

Quantifying the exact profitability of bookies can be challenging, as it varies widely among different operators and depends on numerous factors like the volume of bets, the effectiveness of their odds-setting, and their ability to balance the books. 

However, rough estimates suggest that a well-run bookmaker can aim for a profit margin between 5% and 10% of the total amount wagered. This means for every £100 bet through their service, they could earn £5 to £10 in profit on average. It's important to note that while these are typical figures, actual profits can fluctuate based on the bookie's skill in managing risks and odds. 

How Much Do Bookmakers Make UK?

In the UK, the earnings of bookmakers can vary significantly, making it hard to pin down precise figures. However, rough estimates suggest that the UK betting industry as a whole generates billions of pounds in revenue each year. 

Individual bookmakers' profits can range from thousands to millions of pounds annually, depending on their size, clientele, and the efficiency of their operations. Major players in the market who manage to effectively apply strategies such as balancing the books and utilising the overround principle tend to be at the higher end of this scale. 

Do Bookmakers Ever Lose Money?

Yes, bookmakers can lose money. Despite their best efforts to ensure profitability, the inherent unpredictability of gambling means that upsets and unexpected outcomes can and do occur. 

High-profile events, in particular, can produce results that defy the odds, leading to significant payouts to bettors and, consequently, losses for bookies. 

However, bookmakers employ several strategies to minimise these risks and protect their bottom line. Through backing and laying bets, they cover a range of possible outcomes, ensuring they have stakes on both sides of a wager. Balancing the books allows them to adjust odds to manage their liability and encourage bets that keep their exposure even across all outcomes. Additionally, the overround principle guarantees them a margin of profit over the total bets placed. 

While these methods can't eliminate the possibility of losses entirely, they significantly reduce the risk, helping bookmakers stay profitable over the long term. 

Is It Risky To Be a Bookmaker?

Being a bookmaker carries inherent risks, as it involves dealing in the inherently unpredictable world of gambling. Outcomes of sports matches, races, and other events are random and can fluctuate widely, making it challenging to always predict accurately. This unpredictability means that bookmakers can face significant financial losses when outcomes don't align with their odds. 

However, as we've discussed in this blog post, bookmakers are not left entirely to the mercy of chance. They employ several strategies to mitigate these risks, including backing and laying bets to cover all possible outcomes, balancing the books to ensure they profit regardless of the event result, and applying the overround principle to maintain a profit margin. 

While these methods don't eliminate risk entirely, they significantly reduce the potential for losses, allowing bookmakers to operate successfully in the long term despite the uncertainties of the gambling business. 


In conclusion, bookmakers navigate the unpredictable world of gambling with savvy strategies to ensure their profitability. Through the practices of backing and laying bets, they cover all outcomes; by balancing the books, they manage risk and secure profits regardless of event results; and with the overround principle, they guarantee a margin of profit on every bet placed. 

Although the business carries inherent risks due to the random nature of gambling events, these strategies significantly reduce potential losses, allowing bookmakers to thrive. Understanding these mechanisms gives us insight into the complex yet fascinating world of bookmaking. 

As always, if engaging in any form of gambling, please do so responsibly.