Bookmakers compile Sports bets and set the odds. The odds reflect the probability of an event outcome – the lower the probability, the higher the odds. In order to evaluate the probability correctly the bookmaker should be knowledgeable about the sport type and understand what affects the match outcome.
Bookmakers set two types of Bets: Pre-match and Live. In Pre-match they use all the facts and rumours that might affect the match outcome: the statistics of the latest matches and head-to-head games, the condition of the participants, injuries and the conflicts. In Live a quick assessment of the match course is more important: the bookmaker reviews the probabilities of outcomes depending on effective actions of the players and the statistics. A part of the work in today's betting companies is taken on by software systems that help change the odds faster on the basis of the known data.
How do bookmakers differ from totalisers?
A totaliser involves bets on a certain event. Totaliser operation is similar to the operation of a betting company: a player knows the conditions under which he is going to win and understands how his bet will increase in the case of a win. The difference lies in the way the cash bank is formed and in the odds.
In totaliser the players compete with other players. The totaliser win depends on the number of participants and on the bet amounts. After an event ends the organiser collects his commission and the winners receive equal amounts. For this reason it is impossible to calculate the amount of winnings in advance.
In the betting company the participants play against the company. The amount of winnings is known in advance and depends on the odds that are set at the moment when the bets are placed. Payments are provided from the betting company bank and do not depend on the number of participants.
Due to organisational difficulties and narrow events selection totalisers quickly lost their popularity. Also, totalisers were unable to handle a large number of players: if there were a few hundred of players willing to place bets the organisers failed to accept the bets before the event and to pay out the winnings right after the event completion. Betting companies did not need centralised cash flows: a bet could be placed any time at any dealer and the win could be redeemed by the betting slip in the company office.
When were the first bookmakers established?
The first bets were placed in Ancient Greece in the 5th century BC. People placed bets on totalisers, so they were competing not against the bookmaker, but with each other, and when they won, funds were redistributed among the winners. Bookmaking only appeared as a profession 2,300 years later in England. The first bookmaker was Harry Ogden, who worked in the 1790s.
Bookmaking spread widely in the middle of the 19th century and replaced totalisers. Bookmakers had an advantage over totalisers because they didn't have to organise large collection points for bets, so they could work underground during prohibitions.
Together with bookmakers, odds also appeared. Bookmakers predicted winners and let customers place bets with odds that increased their winnings depending on the probability of winning: the lower the probability, the higher the profit. Odds were written as fractions, for example, 1/10. In these odds, the first number showed the potential net profit, and the second showed the amount to bet to earn it. So 1/10 meant that you needed to bet 10 pounds to win one pound. These types of odds are still used today and are referred to as British odds.
In 1994, the governments of Barbuda and Antigua were the first to legalize online betting and issue licenses. The first company to start accepting bets online was a German company, InterTops. In January 1996, a Finnish customer placed $50 on a Tottenham — Hereford match.