How do betting companies back their bets?do they back them as they already have plenty of money in the bank,?

Question

so they can cover that risk of losing when its been calculated or is there some other way they do it? also how do they come up with their odds?

Answer 1

They calculate the odds so that they show a profit. If they take a really big bet which they think could make a loss then they lay the bet off with other bookies.

Answer 2

I don't know how it is in other countries, but Nevada gaming law requires every casino to have enough money in house to cover EVERY bet on the casino floor. That means they must have enough money to pay up if every person in the whole place cashes out at the same time. During major events like boxing fights and the Super Bowl they will actually brings millions of dollars in extra cash in to cover the increase in bets.

Answer 3

Bookies try to balance the bets they have on the books, so that whoever wins the bookie can cover the winners from the losers. They do this in 2 ways, they charge a premium on the odds they are offering (if you add up all the odds, they go over 1 and you can see their expected margin) and if they are holding quite large bets they try to share the risk amongst themselves.

This is for UK/US style bookies. There are other countries where they just take a set rake from all bets and the odds are just determined by demand.

But this was in the old days... the bookies are a dying breed and now the betting game is moving online to exchanges like betfair.  Where players lay odds and back them with their own money/credit.

Answer 4

They will lay off with other bookies ,some now use exchanges if they have too much liabilty or an unbalanced book.

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