Bookmakers: How do they work?

Téléphone avec l'application d'un bookmaker ouverte

When you start in any discipline, you have to learn the basics. You don’t learn to ride a bike on two wheels from the start! In sports betting too, you have to start with the basics. And for that, let’s start by knowing who we’re going to play against: the bookies.

In this article, let’s see what a bookie is. How does he manage to win for sure and every day? We will then look at the coasts proposed by the bookmakers. What do they mean? How do you interpret that number? Because it is this number that will be the only information coming from the bookmaker.

Before continuing, and for those who are just starting to train, we advise you to go for a ride on our glossary because you will discover some of the terms used in this article.

What is a bookmaker ?

Bookmakers are companies that offer players to bet money on events, mainly sporting ones.Even 10 years ago, bookmakers were physical shops and some were associated with tobacco offices. With the advent of the internet in players’ homes, many new online bookmakers have arrived on the market.

The main goal of bookmakers is to have more and more players who bet more and more money. Indeed, the operation of a bookmaker makes him earn money on almost all the bets he offers, regardless of the outcome of the proposed meeting. Therefore, the more active players and the bigger they bet, the more money bookmakers earn. 

The coasts of bookmakers

Now that we know the bookmaker’s goal, let’s see how he can achieve it. To do this, punters have to bet money. And for that, he has to propose ribs on events. It can be on the winner of a game, on the number of goals in a football game, on who will win the first quarter in basketball, on the podium of a Formula 1 race, ….

But what does a coast mean? It reflects a probability of an event occurring. The bookmaker collects information about the match and analyzes the data. Then, he estimates, through algorithms, a percentage chance that the event will occur.For example, if he believes that Team A has a 75% chance of winning the game. This probability (this percentage) will be transformed into a coast with a simple formula: 


That is in our example 1.33 (1 / 0.75).

If you want to know more about the calculation of ribs by the bookmakers, I invite you to read the article we did about it. We detail the different elements that make the coast evolve between the time it appears at the bookmaker and the beginning of a match (before moving to a live coast).

Bookmaker: How do they calculate a rib
How bookmakers calculate their ribs

Once the bookmaker has calculated his odds and therefore his ribs, he will be interested in his goal: to make money regardless of the outcome of the match. But how is this possible?

Return to Players Rate

To understand, let’s take a look at the bookmaker’s cousin: the casino. The phrase “The bank wins” is well known to everyone. But do you know why?On slot machines, casinos only pay out a portion of the money bet by players. The machine is programmed so that when a jackpot is won, the amount won does not exceed a certain percentage of the money raised as the games go. On slot machines, this information is even available to the player. It is displayed on a metal pad on the side or back of the machine. This ratio of money returned to players (money wagered – money returned) is called “payout rate” or “player return rate” or “TRJ“. It is controlled by an independent body to verify that the casino does not cheat and properly pays back some of the money bet.

This is the first element that the bookies have taken from their cousin. Bookmakers work the same way. They calculate their ribs to ensure a systematic win for each type of bet.

The bookmakers' RPR : a concrete example

Let’s be concrete, let’s see how it works.Let’s take an easy example with only 2 issues: a tennis match with a Player A versus a Player B. For the “Winner of the Match” type of bet, let’s say we have odds 2.02 for Player A and 1.77 for Player B.

The formula for calculating RPR is as follows: 

RPR – 100 / ( 1 / OddJoueurA – 1 / OddPlayB)

For our example, this gives: 100 / ( 1/2.02 – 1/1.77 ) – 94.33%

Thanks to this calculation, we know that 5.67% of bets on this bet will not be returned to players! And as a result, the bookmaker guarantees a win before making the redistribution to the punters. To achieve this, he must calculate fair odds.

Limiting winnin players

Dominos et cubes avec écrit STOP

Another technique that bookmakers borrowed from casinos: limit winning players. If you earn too much money facing “the bank” on a blackjack or roulette table, a security officer will ask you to leave the table or even the casino. If you win too often, you’re not going to be banned from coming to play.

Bookmakers do the same thing if you start making too much money at home, they’ll start by limiting your bets. For example: a maximum of €10 or €5 per bet. Or it will require you to make combined bets of at least 2 bets. Others will be even more restrictive and will simply block your account (and your money) …

The Pinnacle exception

Now that we have seen how bookmakers work in generality, we need to look at the exceptions. There is indeed one that stands out because of its marketing and strategic positioning. This bookmaker is Pinnacle.

Pinnacle has taken the opposite tying of these competitors. It removed the two major drawbacks for punters: TRJ and punter limitation. Thus, it does not limit the winning players and offers overall higher ribs and TRJs than its competitors. That’s why many punters say he’s the best bookmaker in the world.

Logo Pinnacle

But why is he doing this? Since these are the two elements that guarantee long-term profitability for him, the question can be asked. Actually, not quite. There is a third element to consider: the volume of bets.Like a newcomer to a market that sells its prices: it makes less margin at each sale but makes much more volume. As a result, Pinnacle earns as much or more than other bookmakers. Indeed, it has more punters and a much larger number of winning bettors than its competitors.

In addition, Pinnacle benefits from these winning bettors. If they are betting on an event, they may have found information that it has not taken into account. So he often adjusts his ribs according to these punters.

Pinnacle has a very interesting Youtube channel, but in English only. He even made a video on the subject of this article: How do bookies make money?We’ll let you find out.

With all these elements, you now have a better understanding of bookmakers and how they work.We still have one thing to see: how do they calculate a coast?That is what we will see in a future article.Stay connected!

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