What is a Bookie
A bookie is someone who facilitates gambling, most commonly on sporting events. A bookie sets odds, accepts and places bets, and pays out winnings on behalf of other people. This is often illegal activity.
BREAKING DOWN Bookie
"Bookie" is a slang term for "bookmaker." Bookies do not usually make their money by placing bets themselves, but by charging a transaction fee on their customers' bets known as a "vigorish," or "the vig." Bookies may also lend money to bettors.
The types of gambling enabled by bookies are not always legal. Bookmaking and placing bets through a bookmaker can also be illegal. The legality of different types of gambling is determined by state governments. (For example, New York recently allowed betting via online games DraftKings and FanDuel in 2016. This was previously temporarily illegal.) Historically sports betting has only been legal in Delaware, Montana, Nevada, and Oregon. The illegal operations of bookies provides a black market for sports betting for the rest of the nation. While some bookies are involved in organized crime, others operate independently, simply taking bets for a few friends, family members, and/or colleagues.
Bookies and Setting the Odds
One of the most critical ways bookies ensure their winnings is by calculating the odds that they will win an event, sometimes by employing teams of statisticians and developing complex models. The terms lines (“money lines”) and spreads (“point spreads”) are critical factors for bookies. Sometimes these calculations are based on those, developed by casino actuaries (those who deal with risk calculations). In general, they underscore which team bookies believe will win an event; these can be adjusted, leading up to a match, based on various bets made in their books, along with fluctuations in Vegas casino bets, and any additional unexpected events, which may arise (e.g. poor weather, player injuries, negotiations and/or doping scandals among teams).
In October 2017, a team of MIT researchers set out to beat various bookies at their own game; however, when the bookies discovered that the researchers might be ahead of them, they prevented further bets.