Bookmaker

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Bookmakers on a greyhound race course, Reading, Berkshire Bookmakers.jpg
Bookmakers on a greyhound race course, Reading, Berkshire

A bookmaker, bookie, or turf accountant is an organization or a person that accepts and pays off bets on sporting and other events at agreed-upon odds.

Contents

History

The first bookmaker, Ogden, stood at Newmarket in 1795. [1]

Range of events

Bookmakers in many countries focus on accepting bets on professional sports, especially horse racing and association football. However, a wider range of bets, including on political elections, awards ceremonies such as the Oscars, and novelty bets are accepted by bookmakers in some countries.

Operational procedures

By "adjusting the odds" in their favour (paying out amounts using odds that are less than what they determined to be the true odds) or by having a point spread, bookmakers aim to guarantee a profit by achieving a 'balanced book', either by getting an equal number of bets for each possible outcome or (when they are offering odds) by getting the amounts wagered on each outcome to reflect the odds. [2] When a large bet comes in, a bookmaker may also try to lay off the risk by buying bets from other bookmakers. Bookmakers do not generally attempt to make money from the bets themselves but rather by acting as market makers and profiting from the event regardless of the outcome. Their working methods are similar to those of an actuary, who does a similar balancing of financial outcomes of events for the assurance and insurance industries.

Legality

Depending on the country, bookmaking may be legal or illegal and is often regulated. In the United Kingdom, since 1 May 1961, bookmaking has been legal and has even been a small contributor to the British economy, with a recent explosion of interest in the international gaming sector industry. However, gambling debts were unenforceable under British law until Gambling Act 2005 was passed. Many bookmakers are members of IBAS, an industry organisation used to settle disputes.

Bookmaking is generally illegal in the United States, with Nevada being an exception due to the influence of Las Vegas. In May 2018, a United States Supreme Court ruling struck down the Professional and Amateur Sports Protection Act of 1992, which prevented individual states from legalising bookmaking.

In some countries, such as Singapore, Sweden, Canada, and Japan, the only legal bookmaker is owned and operated by the state. In Canada, this is part of the lottery programme and is known as Sport Select.

United Kingdom gambling industry

The first bookmaker in the United Kingdom is considered to be Harry Ogden, who opened a business in the 1790s, although similar activities had existed in other forms earlier in the eighteenth century. [3] [4]

Following the Gaming Act 1845, the only gambling allowed in the United Kingdom was at race tracks. The introduction of special excursion trains meant that all classes of society could attend the new racecourses opening across the country. Cash flowed to the bookmakers who employed bodyguards against protection gangs operating within the vast crowds. [5] Illegal betting shops were fined, but some, like Bella Thomasson, ran betting businesses that the police appeared to turn a blind eye to. [6]

In 1961, Harold Macmillan's Conservative government legalised betting shops, with tough measures enacted to ensure that bookmakers remained honest. A large industry has grown since. At one time, there were over 15,000 betting shops. Now, through consolidation, they have been reduced to between 9,100 and 9,200 in 2013. [7] The group of the largest bookmakers in the country, known as the "Big Three", comprises William Hill, Ladbrokes, and Coral. [8]

Improved TV coverage and the 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 racecourse and use tic-tac 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. A so-called super-casino had been planned for construction in Manchester, but the government announced that this plan had been scrapped on 26 February 2008.

Internet gambling

Although online gambling first started in 1994 when the licensing authority of Antigua and Barbuda passed the Free Trade & Processes Act, bookmakers did not get involved until 2001. They were forced to act when research at the time found there were eight million online players worldwide.

With the arrival of the World Wide Web, many bookmakers have an online brand, but independently owned bookmakers often still maintain a "bricks and mortar" the only operation as the software and hardware required to operate a successful online betting operation are complex and their costs are quite prohibitive; other bookmakers operate "skins" or "white label" websites, which they purchase from one of the large firms. The main websites require bets to be from countries where Internet gambling is allowed and from people over 18 years old. Some small bookmakers and startups purchase software from specialised white label solution providers. Since gambling products have a high conversion rate from one niche to another, most online betting websites also feature other gambling products such as poker, live dealer casino games, lottery, bingo, slots and other casino games. Controversially, the explosion in Internet gambling is being linked to a rise in gambling addiction, according to the UK's help and advice organisations for addicts, GamCare and Gamblers Anonymous.

Increasingly, online bettors are turning to the use of betting exchanges such as Betfair and BETDAQ, 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 are odds that operate at 100% of probabilistic outcomes.

Betting exchanges compete with the traditional bookmaker. They are generally able to offer punters better odds because of their much lower overheads but also give opportunities for arbitrage, the practice of taking advantage of a price differential between two or more markets. However, traditionally, arbitrage has always been possible by backing all outcomes with bookmakers (Dutching), as opposed to laying an outcome on an exchange. Exchanges, however, allow bookmakers to see the state of the market and set their odds accordingly.

With the increasing number of online betting exchanges, betting exchanges are now providing free bet offers in an attempt to lure customers away from the competition. These free bets are generally based on the size of the deposit made into the gambling account. For example, if a customer deposited £20, the betting exchange would deposit an additional £20 for the customer to use. [9] Free bet rules vary depending on the betting exchange.

Some bookmakers have even taken to using betting exchanges as a way of laying off unfavourable bets and thus reducing their overall exposure. This has led to insecurity from some TABs in Australia, state-run betting agencies that attempted to deny Betfair an Australian licence by running unfavourable ads in the media regarding the company. When Tasmania granted Betfair a licence despite these efforts, the Western Australian state legislature passed a law that specifically criminalised using betting exchanges from within the state; however, the law was later ruled to be unconstitutional. As a result, internet gambling in Australia required a new legal framework. The Interactive Gambling Act 2001 regulates the online gambling market in Australia, together with all its amendments. The last amendment was introduced on 13 September 2017. This bill states that online casinos, online poker and live betting are illegal in Australia. The Australian Communication and Media Authority (ACMA) is the regulatory body responsible for all supervising online gambling activities. Online sports betting is legal, however. [10]

Bets are also taken via phones, using email and SMS text messages, [11] 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 the rest of 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 hoardings, stadium signs and competition event titles. Sponsors are especially highlighted in the football category since football fans present a significant percentage of the bookmakers' target group. [12]

Many of the bookmakers are sponsoring some of the major football teams in the major European football leagues, [13] 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. For example, as of 1 January 2020, Germany bettors will not be able to bet more than €1,000 a month. The latest amendment of the ITG states that. New online sportsbook laws are expected shortly in Germany, as this law is only temporary: the expiration date is set to be on 20 June 2020. [14]

The situation is not that strict in France, however. Online sports betting in France is divided into two sections: Autorité de Régulation des Jeux en Ligne (ARJEL) regulates online sports betting, while online horse betting is regulated by the law "Decree 2010-498 from 17 May 2010. International bookmakers are allowed to enter the French market, thanks to the Law No. 2010-476 from 12 May 2010. [15] [16]

With the recent banning of tobacco sponsorship [17] 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 from gaming companies in the Far East and Europe.

The United Kingdom's Gambling Act 2005 introduced 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 that is not regulated by the gambling laws of an EEA state. The Gambling Commission is the body that makes sure all sites and operators follow the new restrictions. In addition to the Gambling Act of 2005, according to the new gambling bill, online gambling sites are only allowed to offer services within the United Kingdom, if they are registered at the UK Gambling Commission. [18]

The situation is more confused in the United States, which has attempted to restrict operators of foreign gambling websites from accessing their domestic market. This resulted in 2007 in a ruling against the US government by the World Trade Organization. [19] However, common online gambling laws in the United States still don't exist - it differs from state to state. All forms of online gambling are illegal within the states of Utah and Hawaii, while the states of Delaware, Pennsylvania and New Jersey took a different approach: almost all forms of online gambling are legal in these states. These are the only US states where online casino sites can be legally registered. It is important to mention that Native Americans have their own gambling legislation - the Indian Gaming Regulatory Act of 1988. However, they need their state's approval to be able to offer their services online. [20]

See also

Related Research Articles

Gambling Wagering of money on a game of chance or event with an uncertain outcome

Gambling is the wagering something of value on an event with an uncertain outcome with the intent of winning something else of value. Gambling thus requires three elements to be present: consideration, risk (chance), and a prize. The outcome of the wager is often immediate, such as a single roll of dice, a spin of a roulette wheel, or a horse crossing the finish line, but longer time frames are also common, allowing wagers on the outcome of a future sports contest or even an entire sports season.

Spread betting is any of various types of wagering on the outcome of an event where the pay-off is based on the accuracy of the wager, rather than a simple "win or lose" outcome, such as fixed-odds betting or parimutual betting.

Betfair is an online gambling company which operates the world's largest online betting exchange. It also offers a Sportsbook, online casino, online poker and online bingo. The company's headquarters are located in Hammersmith in Greater London, England, and Clonskeagh, Dublin, Ireland.

A betting exchange is a marketplace for customers to bet on the outcome of discrete events. Betting exchanges offer the same opportunities to bet as a bookmaker with a few differences. Gamblers can buy and sell the outcome, and they can trade in real-time throughout the event, either to cut their losses or lock in profit. Bookmaker operators generate revenue by offering less efficient odds. Betting exchanges normally generate revenue by charging a small commission on winning bets.

Vigorish is the fee charged by a bookmaker for accepting a gambler's wager. In American English, it can also refer to the interest owed a loanshark in consideration for credit. The term came to English usage via Yiddish slang, which was itself a loanword from Ukrainian or Russian.

Paddy Power is an Irish bookmaker founded in 1988 in Dublin, Ireland. The company conducts business through a chain of licensed betting shops in Ireland and the United Kingdom, and by operating Ireland's largest telephone betting service. On the internet, it offers sports betting, online poker, online bingo, online casino and online games. It merged with Betfair to create Paddy Power Betfair now Flutter Entertainment on 2 February 2016.

Sport Select is a group of sports betting games offered by Canada's lottery corporations. 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 similar in all provinces. Initially created to offer betting primarily on the North American major professional sports leagues, Sport Select has expanded to offer betting on competitions such as the English Premier League and college sports.

Sports betting Form of gambling

Sports betting is the activity of predicting sports results and placing a wager on the outcome. The frequency of sports bet upon varies by culture, with the vast majority of bets being placed on association football, American football, basketball, baseball, hockey, track cycling, auto racing, mixed martial arts, and boxing at both the amateur and professional levels. Sports betting can also extend to non-athletic events, such as reality show contests and political elections, and non-human contests such as horse racing, greyhound racing, and illegal, underground cockfighting. It is not uncommon for sports betting websites to offer wagers for entertainment events such as the Grammy Awards, the Oscars, and the Emmy Awards.

Sportsbook Sports gambling establishment

In 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, ice hockey, soccer, horse racing, greyhound racing, boxing, and mixed martial arts. The method of betting varies with the sport and the type of game. In the US, the Professional and Amateur Sports Protection Act of 1992 allowed only Nevada, Oregon, Montana, and Delaware to legally wager on sports other than horse racing, greyhound racing, and jai alai; the law was ruled unconstitutional on May 14, 2018, freeing states to legalize sports betting at their discretion.

Online gambling is any kind of gambling conducted on the internet. This includes virtual poker, casinos and sports betting. The first online gambling venue opened to the general public, was ticketing for the Liechtenstein International Lottery in October 1994. Today the market is worth around $40 billion globally each year, according to various estimates.

Betting arbitrage is an example of arbitrage arising on betting markets due to either bookmakers' differing opinions on event outcomes or errors. When conditions allow, by placing one bet per each outcome with different betting companies, the bettor can make a profit regardless of the outcome. Mathematically, arbitrage occurs when there are a set of odds, which represent all mutually exclusive outcomes that cover all state space possibilities of an event, whose implied probabilities add up to less than 1. In the bettors' slang an arbitrage is often referred to as an arb; people who take advantage of these arbitrage opportunities are called arbers.

Gambling in the United Kingdom is regulated by the Gambling Commission on behalf of the government's Department for Digital, Culture, Media and Sport (DCMS) under the Gambling Act 2005. This Act of Parliament significantly updated the UK's gambling laws, including the introduction of a new structure of protections for children and vulnerable adults, as well as bringing the burgeoning Internet gaming sector within British regulation for the first time.

Leroy's Horse & Sports Place, also known as Leroy's Race and Sport Book or simply Leroy's, was an operator of sports books in Nevada. As of 2012, it had 72 race and sports books and kiosks. It was based in Las Vegas. Leroy's parent company, American Wagering, was purchased by British bookmaker William Hill in 2012, and its locations were rebranded under the William Hill name.

Mаtched bеtting is a bеtting technique used by individuals to profit from the free bets and incentives offered by bookmakers. Its proponents consider it risk-free in theory as it is based on the use of a set of mathematical equations rather than left to chance.

Gambling in India varies by state as states in India are entitled to formulate their own laws for gambling activities. Some states like Goa have legalised casinos. Common gambling activities like organized betting is restricted except for selective categories including lotteries and horse racing.exemplry decision will be taken on idol betting.

Advantage gambling, or advantage play, refers to legal methods, in contrast to cheating in casinos, used to gain an advantage while gambling. The term usually refers to house-banked games, but can also refer to games played against other players, such as poker. Someone who practises advantage gambling is often referred to as an advantage player, or AP. Unlike cheating, which is by definition illegal, advantage play exploits innate characteristics of a particular game to give the player an advantage relative to the house or other players. While not illegal, advantage play is often discouraged and some advantage players may be banned by certain casinos.

Gambling in South Africa has been heavily restricted since 1673, with South Africa's Gambling Act of 1965 officially banning all forms of gambling except betting on horse racing which existed as a sporting activity.

Pinnacle Sports

Pinnacle is an online gaming website that was founded in 1998. Since its inception, Pinnacle has become a medium-sized, fully licensed, online sportsbook. Pinnacle Sports rebranded to Pinnacle on June 1, 2016 after acquiring the pinnacle.com domain name.

Gambling in Nigeria is not well regulated. Although there is a gambling law in place, many illegal casinos operate in the country. The legal land-based casinos are located in the two largest cities. The biggest casino is The Federal Palace Hotel in Lagos. Nigerian law focuses on activities to reduce money laundering and illegal gambling.

Betting on horse racing

Betting on horse racing or horse betting commonly occurs at many horse races. It started in the UK in the early 1600s during the reign of King James I. Gamblers can stake money on the final placement of the horses taking part in a race. Gambling on horses is, however, prohibited at some racetracks. For example, because of a law passed in 1951, betting is illegal in Springdale Race Course, home of the nationally renowned Toronto-Dominion Bank Carolina Cup and Colonial Cup Steeplechase in Camden, South Carolina.

References

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  2. Cortis, Dominic (2015). "Expected Values and variance in bookmaker payouts: A Theoretical Approach towards setting limits on odds". Journal of Prediction Markets. 1. 9: 1–14. doi:10.5750/jpm.v9i1.987.
  3. Munting, Roger (1996). An Economic and Social History of Gambling in Britain and the USA. Manchester University Press. p. 89.
  4. Vamplew, Wray; Kay, Joyce. (2005). Encyclopedia of British Horseracing. Routledge. p. 50.
  5. Dick Kirby, The Race Track Gangs, The Peeler issue 7 July 2002, 'Friends of the Met Police Museum'
  6. "Thomason, Ann Arabella [known as Bella Thomasson] (1874–1959), bookmaker" . Oxford Dictionary of National Biography (online ed.). Oxford University Press. 2004. doi:10.1093/ref:odnb/56685. ISBN   978-0-19-861412-8.(Subscription or UK public library membership required.)
  7. Gambling Commission Gambling industry statistics April 2009 to September 2012
  8. Vamplew and Kay, p. 51.
  9. "The Most Common Sportsbook Bonus Types" . Retrieved 24 August 2014.
  10. Communications. "Interactive Gambling Act 2001". www.legislation.gov.au. Retrieved 4 September 2019.
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  13. "A Look At Bookmakers Sponsoring Football Clubs". ReliableBookies.com. 19 March 2013. Retrieved 19 March 2013.
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  15. LOI n° 2010-476 du 12 mai 2010 relative à l'ouverture à la concurrence et à la régulation du secteur des jeux d'argent et de hasard en ligne (1). Legifrance. Retrieved 4 September 2019.
  16. Décret n° 2010-498 du 17 mai 2010 relatif à la définition des courses hippiques supports des paris en ligne et aux principes généraux du pari mutuel. Legifrance. Retrieved 4 September 2019.
  17. Holman, C D'Arcy; Donovan, Robert; Corti, Billie; Jalleh, Geoffrey; Frizzell, Shirley; Carroll, Addy (1997). "Banning tobacco sponsorship: replacing tobacco with health messages and creating health-promoting environments". Tobacco Control. The British Medical Journal. 6 (2): 115–121. doi:10.1136/tc.6.2.115. PMC   1759553 . PMID   9291220 . Retrieved 24 August 2014.
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