How do esports betting sites make money?

Ah the question everyone has on their mind: “How do betting sites and the bookmakers make money?” While some owners and operators may shy away from answering this, we pride ourselves on being honest and transparent. News flash...Rivalry is a business and exists to make money. But unlike many others, will tell you exactly how we make it so you can be a smart, informed customer.

We primarily make money two ways:

• On the commission we price into our odds called margin
• Adjusting our odds in real time to balance our books to effectively collect this commission

Margins

We make money is by charging a commission to take bets. This commission will be referred to as margin but is also known by some as rake, vigorish (vig), or juice.

This margin is built into the odds we offer. As an example, odds without our margin would be:

• Team A - 4.23 odds
• Team B - 1.31 odds

If you convert these to their respective implied probabilities (more on this here), Team 1 has a 22% chance of winning and team 2 has a 78% chance of winning.

If we offered the above odds, we'd make $0. So instead of 4.23 and 1.31, we may offer something like:

• Team A - 4.04 odds
• Team B - 1.25 odds

If you work out the implied probabilities on these, you'll end up with a 24.7% and 80%, totaling 104.7%. Ta-da! We have about a 4.7% profit margin on that match. Profit margins for sites usually range anywhere from 4% up to 12%.

Balancing Books

Bettors try to predict the outcome of a match in order to make money. We, the bookmaker, prefer not to gamble. We try to make sure we get bets on all outcomes of a match so that regardless of who wins, we make our margin.

If the odds for a given match are even, say 1.9 for each team and a bet comes in for Team A, we will shift the odds to encourage bets on Team B.

Beating Bookies

We only make our margin on each bet. If we are flawless with setting our odds with thorough knowledge of each team for every game, we'll make our margin every single time. But when we're off a bit, there's an opportunity for educated bettors to crush us. Please don't do this too much or we'll be out of business! 😘