A bookmaker strives to accept bets on the outcome of an event
in the right proportions in order to make a profit regardless of
which outcome prevails. See Dutch book and coherence
(philosophical gambling strategy). This is achieved primarily by
adjusting what are determined to be the true odds of the various
outcomes of an event in a downward fashion (i.e. the bookmaker
will pay out using his actual odds, an amount which is less than
the true odds would have paid, thus ensuring a profit).
The odds quoted for a particular event may be fixed
but are more likely to fluctuate in order to take account of the
size of wagers placed by the bettors in the run-up to the actual
event (e.g. a horse race). This article explains the mathematics
of making a book in the (simpler) case of the former event. For
the second method, see Parimutuel betting. ()
