Explaining a Bookie and How to Use It

A bookie is someone who takes bets on sporting events as a business. In most of the United States, it’s been illegal to bet on sports for decades. Recent legislation has legalized sports betting in roughly half of the United States.

The word “bookie” has a specific connotation, though. A bookie is usually an individual running a sports betting business outside the law.

You never hear someone talking about a Las Vegas bookmaker as a “bookie.” The term has more of a specific connotation than that.


In this post, I look at some of the specific about what a bookie is and what a bookie does.

Where Does “Bookie” Come From and What Does It Do?

“Bookie” is just slang for the word “bookmaker.” This isn’t the kind of bookmaker who constructs and binds books for reading purposes, though. It’s someone who sets odds for sports bets and takes bets from recreational gamblers.

Bookmaking is an old profession, too. The first recorded bookmaker in history was called Ogden and in operation at Newmarket Racecourse as early as 1795.

Bookies use odds to guarantee themselves a profit. Many times, they do this by getting the same number of bets on either side of a contest. They’ll use point spreads and pay off at odds lower than the actual odds of winning to do this.

And if a bookie gets too much action on one side of a match, they’ll buy bets from other bookies to reduce their exposure.

A bookie’s goal isn’t to win bets and profit from them. Their goal is to facilitate bets from both sides and balance the accounting so that they are guaranteed a profit.

Being a bookie sounds shady and maybe even glamorous, but it’s more like being an actuary than anything else.

The Vig and How the Bookie Makes Money

The most common kind of sports betting in the United States is on football, and it almost always involves a point spread. The first step in determining the point spread is deciding who the favorite is. Then, you decide how much they’re probably going to win by.

Instead of needing the underdog to win, they just need to “cover the spread” for a bet on them to win.

And if you bet on the favorite, and they win by less than the point spread, you still lose your bet.

This enables the bookie to set up a bet where the odds of winning are 50/50 no matter which side you take—the favorite or the underdog.

To guarantee themselves a profit, the bookie requires you to lay $110 to win $100. If they have balanced action on a game, they’re guaranteed a profit. The losers pay off the winners, but the winners only get $100 versus the $110 they risked.

This extra $10 per $100 bet is called the “vig,” which is short for “vigorish.” Another way to think about the vig is that it’s a percentage of each bet that the bookie keeps in exchange for facilitating the action. Some people even use the expression to refer to the large amounts of interest charged by loan sharks.

I should also point out that you don’t have to wager in multiples of $110. It’s the ratio that matters. You can place $11 bets, $22 bets, and so on.

The Laws Related to Being a Bookie

Until recently, in the United States, it was illegal to operate a bookmaking operation unless you were in Las Vegas. Changes in laws have resulted in legal bookmakers popping up throughout the country. Sportsbooks are now legal in almost half the United States, with more expected to follow suit.

How does this affect the “bookie,” though?

Strictly speaking, it’s illegal for a small-time bookmaker to operate in the US at all. If he does any kind of business at all over the phone, he’s violating the Wire Act. The nerdy guy at the end of the bar doesn’t have any kind of gambling license, so he’s operating illegally.

I don’t say that to be judgmental. I also don’t intend for that to be a warning. I have plenty of friends who deal with small-time bookies on a regular basis who’ve never had anything but good customer service experiences.

I have a family member who ran a bookmaking operation with his roommates in college. He said that they had to shut it down because they were making so much money that things, especially the parties, got out of control. You can imagine.

Different countries have different laws related to bookmaking. In the United Kingdom, bookmaking has been accepted, legal, and regulated for seemingly ever. (It’s actually only been a few decades.) You can find a bookmaker on practically every corner.

How Do Online Bookies Work?

An online bookie is someone who does most of his business over the internet. Many small-time bookies these days lease an app to manage their business through. This eliminates the need for multiple phone calls, although most of what you would consider neighborhood bookies still do plenty of business over the phone.

Of course, many companies operating overseas couldn’t care less about United States laws regarding bookmaking, and they’re happy to take US customers’ money. Some of these online bookmakers have brick and mortar locations, but others operate exclusively on the web.

The online business works much the same as your neighborhood business, although most online sportsbooks also offer other gambling products like casino games and poker. These are not products normally offered by a neighborhood bookie.

Earlier, I mentioned that bookmakers like to have balanced action on either side of a contest to guarantee a profit. This has become easier than ever because of rise of betting exchanges where bettors bet with each other and cut out the traditional bookie middleman.

This puts betting exchanges in the weird position of competing with and providing services to bookies.

How Do You Find a Bookie?

If you live in a state where regulated bookmakers aren’t operating, it’s easy to find a neighborhood bookie. Just go to a bar where people watch a lot of sports. Get to know the bartender and a couple of the regulars there.

Once you’ve established a relationship with a couple of people there, all you have to do to find a bookie is to ask someone you’re comfortable talking to.

I know that I had no trouble at all finding a bookie at my neighborhood bar. I don’t drink anymore, but I’m also really comfortable doing business on the internet. So, my needs for a bookie aren’t what they used to be.

You could always ask some of the sports fans you know at work if they ever put money on a game. Really, if you can find an individual to bet with who doesn’t charge a vig, you’ll save yourself a lot of money.

The trick for betting with other individuals is this:

You should be careful that you’re at least as smart as the other bettor.

The lines are set up so that there’s theoretically a 50% probability of winning any given bet but, for various reasons, these lines aren’t always accurate.

If you start dealing with a sharp sports bettor, he might have you at a big disadvantage pretty quickly.

Be especially careful with an individual bettor who wants to adjust lines before betting with you.

On the other hand, if you can find someone unsophisticated to bet with, you can profit all day long.

I have a friend who’s a huge Dallas Cowboys fan. He’s always willing to put money on the Cowboys to win, and he doesn’t care about the vig. He never has more than $100 to put on a game, but he’s always willing to bet.

For a small-time bettor like me, he’s like an ATM. I’m not sure he’ll ever wise up. He’s 52 years old already, and he should know better.

But he doesn’t.

Should You Become a Bookie?

I have a friend who’s an accountant, and one of his favorite clients is a bookie. He told me that the guy has never had any trouble with the law. They’re just not that interested in arresting and prosecuting small, neighborhood bookies.

My advice is always to obey the laws in your jurisdiction.

But if you care about risk, the risk of being a bookie—at least legally—is small. The consequences can be serious, though.

Finding clients is as easy as hanging out in a bar and offering to take some action. You need to be good at math and understand how the business works.

Also, keep this in mind:

Neighborhood bookies don’t make that much money. It might sound exciting, but if you have the skillset to be a bookie, you can probably make more money as an actuary or doing someone’s taxes for them.

Conclusion

What is a bookie?

it’s usually a small-time, neighborhood individual who operates a sportsbook business.

What does a bookie do?

He takes bets on sporting events and charges a vig for doing so.

Should you become a bookie?

Probably not, but you know more about it now than you did before!