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Bookies Who Bet – A Recipe for Disaster

December 18, 2018
bookies who bet

In the professional sportsbook industry the business is managed by rules and guidelines meant to maximize the businesses profit. In general, the sportsbooks make its money off the vigorish or “bookie fee”. This is the extra ten percent that the loser of a sports bet will pay, ex. when risking $110 to win $100.

Another way the sportsbook makes is from winning lopsided action games. The sportsbook will typically try to balance their bets and cash in on the vig but sometimes they are left with an uneven number at the start of the game. In the long run, the heavily lopsided action bet on a marquee type game ends up being profitable for the sportsbook. The public usually wagers on lines that have been inflated by other bettors and hyped by sports media. The sportsbooks outlasts and ultimately wins money from undisciplined and under-informed bettors.

If sportsbooks are set up with a business model to make money, then how could they lose money or even fail? One way is if the sportsbook itself is betting on games. This can happen when a sportsbook manager uses his own judgement of which lopsided action to lay off and which to keep. This would in essence be tantamount to the sportsbook manager playing his own picks. The sportsbook has to stick to a mathematical formula to win long-term.

In the realm of “illegal” bookmaking, I remember one guy I knew who was a bookie that destroyed his business betting his own picks. He started taking bets in college so he wouldn’t have to get a “real” job. Then after college he had a regular job but still took bets on the side. He loved the action. The problem with this guy is that he was undisciplined. He was not happy with the numbers working for him long-term, so he would bet his own picks with other bookies in the area. This is a recipe for disaster. He was collecting money from his clients and taking it straight to other bookies to pay them off for his losing wagers.

bookie loses carBetting large sums of money on your own sports picks while also being a bookie has to be the number one mistake a bookie can make. Although the bookie in question was able to get away with this for a few years and still survive, eventually this type of behavior caught up with him. His personal betting became more aggressive and It only took a few very bad weeks of him losing his bets and his clients winning their bets before he was broke. He even had to give his vehicle to one client which he owed $14,000. I think he “sold” it to him for $1.

The moral of this story is you can either be the house or you can be the bettor. You cannot be both. And if you think you can, the only person you are fooling is yourself.

Do large sportsbooks engage in similar behavior as the bookie mentioned above when they move the line according to the way their “sharps” are betting, even if they are heavily exposed on the other side? Is Reverse Line Movement (RLM) really just sportsbooks gambling on the games with their exposure? A strong argument could be made that it is exactly what it is.