A bookmaker (also called a sportsbook in the US) is a business that accepts wagers on sporting events and other contests. The bookmaker sets the odds for each outcome, accepts stakes from bettors, and pays out winnings on successful bets. The margin (or overround) built into the odds ensures long-term profitability for the bookmaker across large bet volumes.
Bookmakers manage their risk through odds management. When too much money is placed on one outcome, the bookmaker shortens its odds to attract money on the opposing side, balancing the book. When perfectly balanced, the bookmaker profits regardless of the result. In practice, perfect balance is rarely achieved — bookmakers also manage unbalanced positions through hedging and liability management.
Types of bookmakers range from traditional high-street betting shops (William Hill, Ladbrokes, Coral in the UK) to online-only sportsbooks (Bet365, Betway, Unibet) to US-facing sportsbooks (DraftKings, FanDuel, BetMGM). Each operates under different regulations depending on jurisdiction, but all share the same fundamental business model.
Account restrictions are a significant reality of bookmaker betting. Bookmakers are private businesses with the right to refuse service or limit stakes. Profitable bettors — especially those who bet early, bet large, or show sophisticated patterns — are routinely gubbed (stake-restricted). This leads many serious bettors towards betting exchanges, where no such restrictions apply.
Example
You visit an online bookmaker and see odds of 1.90 on both sides of a tennis match. The implied probability for each side is 52.6% (total 105.2%). The bookmaker's 5.2% margin means they expect to retain approximately 5.2p of every £1 wagered on this market over a large number of bets. Your £10 bet has an expected loss of £0.26 at these odds, all else being equal.