I’ve heard about gamblers “laying off action”, but I’m not sure exactly what it means. Can anyone provide an example?
I assume it means that someone else, who is willing to take the risk, agrees to cover bets for the bookie. They get the lion’s share of the profits, and the bookie settles for a small percentage. Is this close?
A bookie will always try to have an even amount of dollars bet on “each side” of the proposition. That way the bookie is “not taking a position”- he collects the “vig”, the vigorish, the “fee” that he charges.
For example, if I bet on Syracuse basketball, I might have to put up $115 to win $100. I also probably give away points if Syracuse is the favorite.
If Syracuse “beats the spread”, then I win $100. If they don’t, then I owe the bookie $115.
The bookie then trys to take in a corresponding bet on the opponent. The bettor on the other side, “gets the points” but still has to put up $115 to win $100.
If there are just the two bets, then I, the bookie, will be quaranteed to make $15. I pay out $100 to the winner, but collect $115 from the loser.
So as the betting comes in the line “moves” to try to entice the betting to even out. If it doesn’t then the bookie needs to “lay off” some of the action so that he isn’t taking a position.
Easier said then done, obviously, since whoever he is laying off to has to make the same calculations.
Bob,
Thanks for the explaination about the bookie and the “vig”.
I’m not sure I understand the “lay off” part. Wouldn’t the person who is taking the “lay off” have to have 2 bookies contacting him? I’m confused.
When a bookie “lays off” imbalances, what he or she is doing is making a bet with another bookie, usually one who deals with a larger volume of wagers, either by tacit agreement with the bookie in question, or just by having one of their associates set up an anonymous wager. If they have, say, a $1000 imbalance in favor of Team A, and they want to reduce their risk, they can make a wager for $1000 on Team A, on the best terms they can get. If Team A wins, their own winnings cover the payout they will give to whomever represents that $1000 imbalance. If Team A loses, they collect the losers’ wagers, plus the vigorish, and (hopefully) pay less vig to the bookie they owe. Usually, they don’t want to do this, since chances are that you break even or lose a little bit of money (since the upstream bookie probably sees the same trend in his wagers, he’s likely to not give very good terms). However, in some cases, it’s unavoidable.
IANA bookie, BTW.
When a bookie “lays off” imbalances, what he or she is doing is making a bet with another bookie, usually one who deals with a larger volume of wagers, either by tacit agreement with the bookie in question, or just by having one of their associates set up an anonymous wager. If they have, say, a $1000 imbalance in favor of Team A, and they want to reduce their risk, they can make a wager for $1000 on Team A, on the best terms they can get. If Team A wins, their own winnings cover the payout they will give to whomever represents that $1000 imbalance. If Team A loses, they collect the losers’ wagers, plus the vigorish, and (hopefully) pay less vig to the bookie they owe. Usually, they don’t want to do this, since chances are that you break even or lose a little bit of money (since the upstream bookie probably sees the same trend in his wagers, he’s likely to not give very good terms). However, in some cases, it’s unavoidable.
IANA bookie, BTW.
t may be that I have about $20,000 worth of bets that I have taken in.
There are other bookies who are handling $100,000 of dollars.
So, if I have 15,000 bet on Syracuse and 5,000 on the opponent, I would want to lay off $10,000.
I would bet $10,000 with one of the bigger bookies. I would bet on the opponent.
If Syracuse wins, I pay out $15,000, I keep the $5,750 (5000 plus 15%) and I would get paid 10,000 from the other bookie. I am ahead $750.
If the opponent wins, I keep $17, 250 (15000 plus 15%) and I pay 5,000 and lose the 11,500 (10000 plus 15%). I am ahead $750.
Is my math right 