How Do Sportsbooks Make Money
Posted By admin On 29/07/22The only reliable data we have on how much money sportsbooks make comes from the legal sportsbooks in the state of Nevada. The Nevada Gaming Control Board reports the money coming into sportsbooks and how much of that money is kept as profit.
We took a look at the reports for the last ten years (2005-2014) to find out how much money is bet on sports, what that money is being bet on, and how much profit the sportsbooks are making. We’ve also compiled this data into an easy-to-read infographic that you can view at the bottom of the page!
Nevada Sportsbooks Handle, Profit, & Hold by Year (2005-2014)
For each year in the table below you’ll see a handle, profit, and hold.
The handle is simply the amount of money bet at the sportsbook. Other than 2008 and 2009, sportsbooks have steadily seen an increase in the volume of bets they have been taking. The decline in wagers is most likely linked to the economic crisis in 2008 and 2009.
How Do Sportsbooks Make Money? Sportsbooks and their oddsmakers have quite a mysterious aura about them that not many other professions share. For some reason, they are seen as these all. Depending on the sportsbook selected, the available sporting events will far outweigh the standard games provided and that’s how do sportsbooks make money. Sportsbetting can transcend to politics. Sportsbooks do not always win in the short run but with a proper balance sheet and book, they should always make a net profit. They may “win” your losing bet but they still have to pay “winners”. The vig, or the vigorish, is the number one answer to the question, “Do sportsbooks make money?” Also known as the “juice,” this is the fee that a sportsbook charges for taking wagers from bettors. Balanced Book – Sportsbooks Money Making Strategy The Steelers win the game and cover the -7. The sportsbook pays out $55,000 to customers who took the Steelers.
How Much Do Sportsbooks Make
Even with those lower numbers, books have seen a yearly average of $3.36 billion in wagers every year for the last ten years.
The profit column shows how much all Nevada sportsbooks combined made through sports betting in that year. You will notice that higher profit doesn’t always correlate with a higher handle, and that’s due to a change in the hold.
Nevada’s sportsbooks have profited an average of $236.81 million each year over the past ten years.
In the world of sports wagering the hold is the percentage of winnings in relation to the amount of money that has come in. In other words, the percentage they hold onto after all bets are settled.
The sportsbooks in Nevada have enjoyed an average hold of 7.13% over the last decade.
| Year | Handle | Profit | Hold |
|---|---|---|---|
| 2014 | $4.25 Billion | $278.99 Million | 6.57% |
| 2013 | $3.96 Billion | $255.32 Million | 6.44% |
| 2012 | $3.82 Billion | $224.45 Million | 5.87% |
| 2011 | $3.27 Billion | $200.29 Million | 6.13% |
| 2010 | $3.17 Billion | $213.41 Million | 6.74% |
| 2009 | $2.97 Billion | $202.5 Million | 6.82% |
| 2008 | $3.06 Billion | $216.99 Million | 7.08% |
| 2007 | $3.19 Billion | $262.62 Million | 8.23% |
| 2006 | $3.06 Billion | $288.01 Million | 9.40% |
| 2005 | $2.83 Billion | $225.51 Million | 7.98% |
| Total | $33.58 Billion | $2.37 Billion | 7.13% |
Breakdown by Sport & Wager Type
Using the same data we’ve also been able to figure out exactly how much is being bet on each sport and how much money the books are making on them.
The tables below list the same information as the table above broken down by sport. (Editors note: We were not able to locate data for individual leagues.) The parlay numbers include cross-sport parlays, while the racebook figures include horse and Greyhound racing.
Other sports (e.g. hockey, soccer, tennis, NASCAR, cricket, etc.) account for about 4.7% of the total handle ($1.58 billion), but we do not have specifics for those sports.
Football Wagers
I’m sure it comes as no surprise, football is the king of the mountain when it comes to pure volume, accounting for roughly 39% of all action taken in Nevada sportsbooks.
What interests us most about this data is that, because of its low handle – only about 5% on average – football only accounts for 27.7% of the total profits.
How Does Online Betting Work
| Year | Handle | Profit | Hold |
|---|---|---|---|
| 2014 | $1.75 Billion | $113.73 Million | 6.50% |
| 2013 | $1.62 Billion | $80.82 Million | 4.98% |
| 2012 | $1.57 Billion | $68.46 Million | 4.37% |
| 2011 | $1.34 Billion | $44.28 Million | 3.30% |
| 2010 | $1.19 Billion | $56.43 Million | 4.76% |
| 2009 | $1.09 Billion | $48.67 Million | 4.45% |
| 2008 | $1.12 Billion | $39.28 Million | 3.50% |
| 2007 | $1.18 Billion | $73.53 Million | 6.25% |
| 2006 | $1.14 Billion | $91.14 Million | 8.02% |
| 2005 | $1.05 Billion | $40.37 Million | 3.84% |
| Total | $13.05 Billion | $656.69 Million | 5.00% |
Basketball Wagers
Basketball wagers don’t come in too far behind football in terms of volume, however, there are significantly more basketball games each year and March Madness brings in a huge chunk of that volume.
| Year | Handle | Profit | Hold |
|---|---|---|---|
| 2014 | $1.11 Billion | $54.24 Million | 4.89% |
| 2013 | $1.05 Billion | $59.19 Million | 5.62% |
| 2012 | $975.15 Million | $47.88 Million | 4.91% |
| 2011 | $737.43 Million | $48.82 Million | 6.62% |
| 2010 | $830.42 Million | $39.36 Million | 4.74% |
| 2009 | $803.53 Million | $38.25 Million | 4.76% |
| 2008 | $738.27 Million | $43.48 Million | 5.89% |
| 2007 | $687.19 Million | $37.45 Million | 5.45% |
| 2006 | $635.36 Million | $46.19 Million | 7.27% |
| 2005 | $579.4 Million | $38.36 Million | 6.62% |
| Total | $8.15 Billion | $453.22 Million | 5.68% |
Baseball Wagers
Baseball has the lowest hold, volume, and percentage of total profit of all of the major American sports. This probably isn’t surprising at all.
Wagering on baseball games simply isn’t as popular as the other sports. The games are longer, there are a lot more of them, and the betting is much different.
With that being said, books are still making a combined $24.14 million each year from baseball bets, so it’s not like they are calling it quits any time soon.
| Year | Handle | Profit | Hold |
|---|---|---|---|
| 2014 | $721.83 Million | $21.29 Million | 2.95% |
| 2013 | $681.01 Million | $29.08 Million | 4.27% |
| 2012 | $693.69 Million | $30.11 Million | 4.34% |
| 2011 | $558.01 Million | $19.64 Million | 3.52% |
| 2010 | $528.67 Million | $22.63 Million | 4.28% |
| 2009 | $488.63 Million | $21.4 Million | 4.38% |
| 2008 | $522.01 Million | $23.6 Million | 4.52% |
| 2007 | $528.79 Million | $25.38 Million | 4.80% |
| 2006 | $457.54 Million | $22.15 Million | 4.84% |
| 2005 | $464.07 Million | $26.13 Million | 5.63% |
| Total | $5.64 Billion | $241.4 Million | 4.35% |
Parlays
While parlays account for less than 2% of the total volume taken in by Nevada sportsbooks, they contribute nearly 8% of all profits thanks to a massive 30.56% hold.
By their nature, parlays are a long-shot bet. Everyone loves the chance to cash in big but, as these numbers clearly show, they end up with their tickets in the trash more often than not.
How Does A Bookie Work
| Year | Handle | Profit | Hold |
|---|---|---|---|
| 2014 | $57.78 Million | $21.28 Million | 36.83% |
| 2013 | $57.66 Million | $19.97 Million | 34.63% |
| 2012 | $58.19 Million | $13.58 Million | 23.33% |
| 2011 | $62.63 Million | $17.6 Million | 28.10% |
| 2010 | $56.71 Million | $19.0 Million | 33.50% |
| 2009 | $58.98 Million | $19.21 Million | 32.57% |
| 2008 | $64.61 Million | $20.26 Million | 31.36% |
| 2007 | $68.62 Million | $20.28 Million | 29.56% |
| 2006 | $68.26 Million | $21.09 Million | 30.89% |
| 2005 | $62.86 Million | $15.63 Million | 24.86% |
| Total | $616.31 Million | $187.89 Million | 30.56% |
Racebook Wagers
The data we found on racebooks was by far the most surprising. The racebook actually accounts for less total volume than baseball, however, it trumps even football in terms of the percentage of profit it provides for the sportsbooks – over 30%!
While that might sound shocking at first, it really shouldn’t be when you think about it. Most straight race bets are losers and patrons love to try for big paydays with exotics like exactas and trifectas. This results in a huge 15.74% hold, meaning massive profits!
| Year | Handle | Profit | Hold |
|---|---|---|---|
| 2014 | $344.25 Million | $51.95 Million | 15.09% |
| 2013 | $339.91 Million | $52.48 Million | 15.44% |
| 2012 | $371.24 Million | $54.39 Million | 14.65% |
| 2011 | $391.05 Million | $59.56 Million | 15.23% |
| 2010 | $404.92 Million | $62.32 Million | 15.39% |
| 2009 | $399.76 Million | $66.12 Million | 16.54% |
| 2008 | $484.37 Million | $80.55 Million | 16.63% |
| 2007 | $596.56 Million | $94.26 Million | 15.80% |
| 2006 | $637.19 Million | $96.47 Million | 15.14% |
| 2005 | $569.22 Million | $99.33 Million | 17.45% |
| Total | $4.54 Billion | $717.42 Million | 15.74% |
Yeah, Sports Betting is Huge
It’s hard to keep in perspective that this is only the money coming into sportsbooks in Nevada. Between offshore betting and local bookies, the sheer volume of bets out there on sports has to be astronomical. Other states have started pushing for legalized sports betting in their casinos and these numbers make it easy to see why. In the meantime, it’s a very good time to be a sportsbook in Nevada!