Bookmakers originated in England in the nineteenth century and for many years they mainly operated only on racecourses. Legalised betting in Australia was only available through licensed on-course bookmakers for many years. The 1906 Gaming Act resulted in a huge spike in attendances to race meetings as it became the only place to legally place a bet with a bookie.
Legalised betting through bookmakers is a relatively recent development with most countries only legalising bookmaking and non-course betting since the 1950s. There are some countries where sports betting remains illegal (America is a good example as sports betting is only legalised in the state of Nevada) and many other countries such as Sweden and Canada only permit betting through a state-owned bookie.
Before legalisation, huge underground betting operations flourished with most Australian towns boasting a local “SP Bookie” – typically a trades person or shopkeeper who would take bets on the weekend’s racing action and act as a bookie in their spare time. Many of these SP bookies learnt their trade this way before becoming official on-course bookmakers later in their careers. The arrival of the TAB legalised off-course betting in Australia and the 1990s saw a huge rise in bookies as sports betting was gradually legalised throughout the various states. Bookmaking is now a thriving industry with countless online bookies offering every possible bet imaginable. It remains a highly regulated industry, however, with many countries now looking to limit the power and scope of these huge bookmaking companies.
Since Harold Macmillan legalised bookmaking in the United Kingdom in 1961 a respectable high street bookie presence has developed with over eight thousand betting outlets now open in the UK.
In early years many bets had to be placed with a bookmaker in person or, as technology developed, over the telephone. Recent advances in internet technology have led to the creation of many online bookmakers since 1993 when Centrebet made history as the first Australian bookmaker to receive a betting license, and later became the first Southern Hemisphere bookmaker to establish an online presence. Online bookmaking is now the biggest sector and there are many Australian based internet bookies that offer markets on sports from all corners of the globe. Many of them now also offer political betting (on elections, the US presidency etc) as well as novelty bets on popular television shows such as Australian Idol or Dancing With the Stars.
Bookmaking is an extremely skilled profession. Bookies attempt to make their money by profiting on an event regardless of the outcome by taking appropriate sums of money at their published odds on each possible result. They do this either by taking an equivalent amount of money on each outcome or, more often, by getting the amounts wagered on each outcome to reflect the odds. This is done by altering the odds as bets come in – by shortening them if they receive a lot of money or by lengthening them to encourage punters to back a particular outcome.
The bookmakers cut for any event is generally known as the "vigorish" (or "vig") and this is one of the key ways they make their profit.