Bookmaker
Encyclopedia
Gambling
Gambling is the wagering of money or something of material value on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods...
on sporting and other events at agreed upon odds
Odds
The odds in favor of an event or a proposition are expressed as the ratio of a pair of integers, which is the ratio of the probability that an event will happen to the probability that it will not happen...
.
Range of events
Bookmakers in the United KingdomUnited Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
focus betting on professional sports, especially horse racing
Horse racing
Horse racing is an equestrian sport that has a long history. Archaeological records indicate that horse racing occurred in ancient Babylon, Syria, and Egypt. Both chariot and mounted horse racing were events in the ancient Greek Olympics by 648 BC...
and football
Football (soccer)
Association football, more commonly known as football or soccer, is a sport played between two teams of eleven players with a spherical ball...
; however a wider range of bets, including on political elections, awards ceremonies such as The Oscars, and novelty bets can also be placed.
Operational procedures
By adjusting the odds in his favor or by having a point spread, the bookmaker will aim to guarantee a profit by achieving a 'balanced book', either by getting an equal number of bets for each outcome, or (when he is offering odds) by getting the amounts wagered on each outcome to reflect the odds. When a large bet comes in, a bookmaker can also try to lay off the risk by buying bets from other bookmakers. The bookmaker does not generally attempt to make money from the bets themselves, but rather profiting from the event regardless of the outcome. Their working methods are similar to that of an actuaryActuary
An actuary is a business professional who deals with the financial impact of risk and uncertainty. Actuaries provide expert assessments of financial security systems, with a focus on their complexity, their mathematics, and their mechanisms ....
, who does a similar balancing of financial outcomes of events for the assurance and insurance industries.
Legality
Bookmaking may be legal or illegal, and may be regulated; in the United Kingdom it was at times both regulated and illegal, in that licenses were required but no debts arising from gambling could be enforced through the courts. Now, since the inception of the National LotteryNational Lottery (United Kingdom)
The National Lottery is the state-franchised national lottery in the United Kingdom and the Isle of Man.It is operated by Camelot Group, to whom the licence was granted in 1994, 2001 and again in 2007. The lottery is regulated by the National Lottery Commission, and was established by the then...
, it is not only legal but also a small contributor to the British economy, with a recent explosion of interest with regard to the international gaming sector industry. However, gambling debts were unenforceable under English law
English law
English law is the legal system of England and Wales, and is the basis of common law legal systems used in most Commonwealth countries and the United States except Louisiana...
until the Gambling Act 2006. Trusted legal bookmakers are members of IBAS
Independent Betting Adjudication Service
The Independent Betting Adjudication Service , founded in 1998, is a third party organization that settles disputes between gambling establishments registered with IBAS and their customers in the United Kingdom. The organization, which was originally part of the Sporting Life’s Green Seal service,...
, an industry standard organisation to settle disputes.
Bookmaking is generally illegal in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, with Nevada
Nevada
Nevada is a state in the western, mountain west, and southwestern regions of the United States. With an area of and a population of about 2.7 million, it is the 7th-largest and 35th-most populous state. Over two-thirds of Nevada's people live in the Las Vegas metropolitan area, which contains its...
being a notable exception.
In some countries, such as Singapore
Singapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...
, Sweden
Sweden
Sweden , officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund....
, Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
, Hong Kong
Hong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...
and Japan
Gambling in Japan
Gambling in Japan is generally banned by the Criminal Code chapter 23, however there are several exceptions, including betting on horse racing and certain motor sports....
, the only legal bookmaker is owned and operated by the state. In Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
, this is part of the lottery
Lottery
A lottery is a form of gambling which involves the drawing of lots for a prize.Lottery is outlawed by some governments, while others endorse it to the extent of organizing a national or state lottery. It is common to find some degree of regulation of lottery by governments...
program and is known as Sport Select
Sport Select
Sport Select is to a group of sports betting games offered by Canada's provincial governments. In Quebec, the program is known as Pari sportif, in Ontario and Atlantic Canada it is known as Pro-Line while in British Columbia, it is known as Sports Action. However, the rules for the games are...
.
United Kingdom gambling industry
Traditionally, bookmakers have been located at the racecourse, but improved TV coverage and modernisation of the law have allowed betting in shops and casinos in most countries. In the UK, on-track bookies still mark up the odds on boards beside the race course and use tic-tacTic-tac
Tic-tac is a traditional method of signs used by bookmakers to communicate the odds of certain horses. It is still used in on-course betting in the UK...
or mobile telephones to communicate the odds between their staff and to other bookies, but, with the modernisation of United Kingdom Bookmaking laws, online and high street gambling are at an all-time high, with a so-called Super Casino having been planned for construction in Manchester prior to the government announcing that this plan had been scrapped on 26 February 2008.
The first bookmaker in the UK is considered to be Harry Ogden, who opened a business in the 1790s, although similar activities had existed in other forms earlier in the century. In 1961, Harold Macmillan's Conservative Government legalised betting shops and tough measures were enacted to ensure that bookmakers remained honest. A large industry has grown since. At one time there were over 15,000 betting shops in the UK. Now, through consolidation, they have been reduced to about 8,500. The group of the largest bookmakers in the country, known as the "Big Three", comprises William Hill, Ladbrokes
Ladbrokes
Ladbrokes plc is a British based gambling company. It is based in Rayners Lane in Harrow, London owned by Bhavin Kakaiya. From 14 May 1999 to 23 February 2006, when it owned the Hilton hotel brand outside the United States, it was known as Hilton Group plc...
, and Coral.
Internet gambling
With the arrival of the World Wide WebWorld Wide Web
The World Wide Web is a system of interlinked hypertext documents accessed via the Internet...
, many bookmakers have an online brand, although independently owned bookmakers often still maintain a "bricks and mortar" only operation and others operate a "skin" or "white label" operation which they purchase from one of the large firms as is the case with BetDirect and Betterbet. The main websites only accept bets from countries where Internet gambling is not prohibited, and from people over 18 years old. Often these websites are linked to online casinos. Controversially, the explosion in Internet gambling is being linked to an increase in gambling
Gambling
Gambling is the wagering of money or something of material value on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods...
addiction, according to the UK's help and advice organizations for addicts, GamCare
GamCare
GamCare offers guidance and counselling towards their efforts of dealing with the social ramifications of gambling in the United Kingdom. GamCare, a charitable organization, was founded in April 1997. In October of that year, Adrian Scarfe, then Head of Clinical Services at GamCare, launched the...
and Gamblers Anonymous
Gamblers Anonymous
Gamblers Anonymous is a twelve-step program for problem gamblers. GA began in Los Angeles on September 13, 1957. As of 2005 there were over 1000 GA meetings in the United States and meetings established in the United Kingdom, Spain, New Zealand, Australia, Brazil, Israel, Kenya, Uganda, Korea and...
.
Increasingly, online betters are turning to the use of betting exchanges
Bet exchange
A betting exchange is an entity which provides "trading" facilities for retail or bookmaker customers to buy and sell contracts. Contracts are structured as binary options. Some betting exchanges may also offer CFD products...
such as Betfair
Betfair
Betfair is the world's largest Internet betting exchange. The company is based in Hammersmith in West London, England. Since Betfair was launched in June 2000 it has become the largest online betting company in the UK and the largest betting exchange in the world. Betfair claim to have over 3...
and BETDAQ
BETDAQ
BETDAQ is the trading name of Global Betting Exchange, a betting exchange operator based in Ireland. It is the second largest betting exchange operator in the market, with Betfair being the largest....
, which automatically match Back and Lay bets between different bettors, thus effectively cutting out the bookmaker's traditional profit margin also called an overround.
These online exchange markets operate a market index of prices near but usually not at 100% competitiveness as exchanges take commissions on winnings. True wholesale odds
Wholesale odds
Wholesale Odds are the "real odds" or 100% probability of an event occurring. This 100% book is displayed without any bookmakers profit margin, often referred to as a bookmakers "overround" built in...
are odds that operate at 100% of probabilistic outcomes.
Betting exchanges compete with the traditional bookmaker. Not only are they generally able to offer punters better odds due to their much lower overheads, but also in giving opportunities for arbitrage
Arbitrage
In economics and finance, arbitrage is the practice of taking advantage of a price difference between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices...
: the practice of taking advantage of a price differential between two or more markets, although traditionally arbitrage has always been possible by backing all outcomes with bookmakers (dutching) as opposed to laying an outcome on an exchange. Exchanges do, however, allow bookmakers to see the state of the market and can set their odds accordingly.
Some bookmakers have even taken to using betting exchanges as a way of laying off unfavorable bets and thus reducing their overall exposure. This has led insecurity from some TAB
Totalizator Agency Board
Totalisator Agency Board in Australia and New Zealand, universally shortened to TAB, is the name given to monopoly totalisator organisations. All were originally government owned...
s in Australia, state-run betting agencies which attempted to deny Betfair an Australian license by running unfavorable ads in the media regarding the company. When Tasmania
Tasmania
Tasmania is an Australian island and state. It is south of the continent, separated by Bass Strait. The state includes the island of Tasmania—the 26th largest island in the world—and the surrounding islands. The state has a population of 507,626 , of whom almost half reside in the greater Hobart...
granted Betfair a license despite these efforts the Western Australian state legislature passed a law that specifically criminalised using betting exchanges from within the state; however, that law was later ruled to be unconstitutional.
Bets are also taken via phones, using SMS text messages, though poker and other sports are more suited to other media. As technology moves on, the gambling world ensures it is a major player in new technology operations.
Most televised sports in the United Kingdom and Europe are now sponsored wholly or partly by Internet and high street bookmakers, with sometimes several bookmakers and online casinos being displayed on players' shirts, advertising
Advertising
Advertising is a form of communication used to persuade an audience to take some action with respect to products, ideas, or services. Most commonly, the desired result is to drive consumer behavior with respect to a commercial offering, although political and ideological advertising is also common...
hoardings, stadium signs and competition event titles, although Werder Bremen are currently fighting the German courts for the freedom to continue featuring bookmaker Bwin on their shirts, as Germany and France take action against online gamers.
With the recent banning of tobacco sponsorship, and the significant commercial budgets available to the gaming industry, sponsorship by car manufacturers, alcoholic drinks, soft drinks and fast-food marketers is being rapidly replaced by sponsorship by gaming companies in the Far East and Europe.
The United Kingdom Gambling Act 2005
Gambling Act 2005
The Gambling Act 2005 is an Act of the Parliament of the United Kingdom. It mainly applies to England and Wales, and to Scotland, and is designed to control all forms of gambling...
introduces a new regulatory system for governing gambling in Great Britain. This system includes new provisions for regulating the advertising of gambling products. These provisions of the Act came into effect in September 2007. It is an offence to advertise in the UK, gambling that physically takes place in a non-European Economic Area (EEA), or in the case of gambling by remote means, gambling which is not regulated by the gambling laws of an EEA state.
The situation is more confused in the United States, which has attempted to restrict operators of foreign gambling websites accessing their domestic market. This resulted in 2007 in a ruling against the US government by the World Trade Organization
World Trade Organization
The World Trade Organization is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade , which commenced in 1948...
.
See also
- Bookies (film)Bookies (film)Bookies is a 2003 movie written by Michael Bacall and directed by Mark Illsley. The story revolves around the lives of four college students...
- Fixed-odds gamblingFixed-odds gamblingFixed-odds betting is a form of wagering against odds offered by a bookmaker, an individual, or on a bet exchange.-Calculating fixed odds:It is customary with fixed-odds gambling to know the odds at the time of the placement of the wager , although this category also includes wagers whose price is...
- Glossary of bets offered by UK bookmakersGlossary of bets offered by UK bookmakersThis glossary of bets offered by UK bookmakers is a non-exhaustive list of traditional and popular bets offered by bookmakers in the United Kingdom...
- List of bookmakers
- Match fixingMatch fixingIn organised sports, match fixing, game fixing, race fixing, or sports fixing occurs as a match is played to a completely or partially pre-determined result, violating the rules of the game and often the law. Where the sporting competition in question is a race then the incident is referred to as...
- Mathematics of bookmakingMathematics of bookmakingIn betting parlance, making a book is the practice of laying bets on the various possible outcomes of a single event. The term originates from the practice of recording such wagers in a hard-bound ledger and gives the English language the term bookmaker for the person laying the bets and thus...
- Numbers gameNumbers gameNumbers game, also known as a numbers racket, policy racket or Italian lottery, is an illegal lottery played mostly in poor neighborhoods in the United States, wherein a bettor attempts to pick three digits to match those that will be randomly drawn the following day...
- Off-track bettingOff-track bettingOff-track betting refers to sanctioned gambling on horse racing outside a race track.-US history:...
- ParlayParlay (gambling)A parlay or accumulator is a single bet that links together two or more individual wagers and is dependent on all of those wagers winning together. The benefit of the parlay is that there are much higher payoffs than placing each individual bet separately since the difficulty of hitting it is much...
- Point shavingPoint shavingIn organized sports, point shaving is a type of match fixing where the perpetrators try to prevent a team from covering a published point spread. Unlike other forms of match fixing, sports betting invariably motivates point shaving. A point shaving scheme generally involves a sports gambler and one...
- Problem gambling
- SP bookmakingSP bookmakingStarting price or SP bookmaking literally refers to taking bets at fixed odds, i.e. a fixed starting price, as opposed to the totalisator model of betting...
- Sports bettingSports bettingSports betting is the activity of predicting sports results and placing a wager on the outcome.-United States of America:Aside from simple wagers such as betting a friend that one's favorite baseball team will win its division or buying a football "square" for the Super Bowl, sports betting is...
- SportsbookSportsbookIn the United States a sportsbook or a race and sports book is a place where a gambler can wager on various sports competitions, including golf, football, basketball, baseball, hockey, soccer, horse racing, boxing, and mixed martial arts. The method of betting varies with the sport and the type of...
- VigorishVigorishVigorish, or simply the vig, also known as juice or the take, is the amount charged by a bookmaker, or bookie, for his services. In the United States it also means the interest on a shark's loan. The term is Yiddish slang originating from the Russian word for winnings, выигрыш vyigrysh...
Further reading
- Cassidy, Rebecca (2002). The Sport of Kings: Kinship, Class, and Thoroughbred Breeding in Newmarket. Cambridge University PressCambridge University PressCambridge University Press is the publishing business of the University of Cambridge. Granted letters patent by Henry VIII in 1534, it is the world's oldest publishing house, and the second largest university press in the world...
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