Up until about 20 years ago, if you wanted to place a bet you had to physically get your to a bookmaker to place it. Then the internet happened and the entire gambling world was turned on its head.

Suddenly you could open your computer and simply pick the bet you wanted to place and with the click of a mouse it was done. Since then things have only advanced further. Technology has come so far that there are now hundreds of sports and betting markets available.

You can wager on a game taking place on the other side of the world. You can bet on who will score the next point in a tennis match – while the game is live! The possibilities are endless. But that doesn’t mean we still don’t have questions about how it all happens.

So we’re to answer some of the most frequently asked queries about online bookmakers.

HOW DO BOOKMAKERS SET ODDS

In days gone by there was literally a person sitting with a book or ledger setting odds. Those times are long gone and now online bookmakers use a very complicated set of mathematical equations to work out the odds that you see online. But they still need a little bit of human input.

For example, in horse racing, calculating odds requires a team that works behind the scenes. These people are called Odds Compilers. And their job is to set the right price for each runner.

They take all available information into account. Using form experts, private handicappers, past performances, etc…, they compile everything they have and compare the results of the horses in the race. Then they work in the bookmaker profit margin.

That information is fed into a computer program and the odds are calculated. No matter the outcome of an event, the bookmaker makes a profit. It is all about databases, statistics and mathematical models.

Essentially a computer determines the odds.

HOW MANY BOOKMAKERS IN THE UK?

There are over 80 online bookmakers licensed to operate in the UK. They are licensed and regulated by the Gambling Commission and must adhere to very strict gambling rules that are set in law.

You may only be able to think of a few off the top of your head. And these are generally the big players like Paddy Power, Ladbrokes, William Hill, Coral, BetFred etc… But you also have to consider all of the smaller bookmakers that attend racecourses or only have one shop in a smaller town.

They may not be able to compete on a grand scale but they are still subject to the exact same rules and regulations.

OFFERS AND PROMOTIONS

With 80 different bookmakers operating online in the UK there is a lot of competition for your business. That’s why they always have offers and promotions. The more attractive they can make the offer, the bigger the chance that you will bet with them.

Once you’ve placed a few bets with an online bookmaker, maybe even downloaded their app, then you start to become quite loyal. A few small bets here and there from hundreds of thousands of customers soon adds up.

So it becomes a numbers game. People spending thousands on a single bet is not as common as you think. Bookmakers make their money from millions of little bets placed throughout the year.

If they have to take a hit on a juicy offer or promotion every now and then, that’s the price they are willing to pay to keep you coming back.

WHY DO BOOKMAKERS OFFER CASH OUT?

If you’re not familiar with the term ‘cash out’ it is when you place a bet but before the result of that bet can be determined the bookmaker offers you the chance to take a settlement.

Here’s a very basic example. You place £10 on Liverpool to win a match at odds of 5/1. If you win you get back £50 plus your £10 stake. 70 minutes into the game and Liverpool are leading 1-0.

The bookmaker offers you £25 to cash out. That is the total amount you will get from the bet and includes your stake which will not be returned separately.

Here’s the dilemma, if you take the money your bet ends. And if Liverpool goes on to win the match you will have lost out on the rest of the winnings.

However, if they concede and the game ends in a draw you lose it all and get nothing. That said, there is often the option to only cash out part of the bet.

So why do bookmakers offer the cash out service? Because it makes them money or reduces their losses. In the scenario above, they will have already calculated the chances of Liverpool winning the game if they are leading at 70 minutes.

They know that if Liverpool wins they will have to give you back £60 – your £50 winnings and your £10 stake. If you take the £25, they save themselves £35.

Cash Out is a numbers game for both the customer and the bookmaker.