Question by K: How does bookmaking work?
We know that bookies take bets from gamblers, but how do they “know” the correct odds for an event to happen? If they don’t lay the correct odds, then they would lose. What are some of the math theories involved in determining the odds of winning / losing. Lastly, how is risk tolerance (or spread) determined by the bookie?

Best answer:

Answer by Chubbsy Wubbsy
The bookmaker tries to set the line so there are equal bets on each side. Then he/she makes the extra 5-10% that the loser pays to handle the transaction.

For example, take the Steelers +14. Give the bookie 0 to win 0. Someone else will take the Steelers -14. If the Steelers win by 15, then the loser effectively pays 0 to the bookie, 0 goes to the person who bet on the Steelers -14, and the goes to the bookie.

You should be ready to open up shop!

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