A sportsbook is a business that accepts bets on the outcome of sporting events, sets the odds on those events, and makes money from the margin built into the odds. It is one of the two pillars of iGaming alongside online casino, and understanding what it is - and how it differs from a casino - is the starting point for anyone weighing whether to run one.
The simple definition
At its core a sportsbook does three things: it prices events (sets odds), it accepts wagers from customers, and it pays out winners. The business model is the gap between the true probability of an outcome and the odds offered. A sportsbook prices its markets so that the implied probabilities sum to more than 100% - that extra slice is the margin, sometimes called the overround or the vig. Across enough bets, that margin is the operator's gross win.
How a sportsbook makes money
On a major football match, a sportsbook might run a margin of 4-8%. That is the theoretical hold before anything else. What the operator actually keeps depends on odds compilation quality, how well it manages risk on big outcomes, and how disciplined it is on bonuses. A poorly-run sportsbook can give back most of its theoretical margin through bad pricing and sharp customers; a well-run one defends it. This is why the trading function is the heart of a sportsbook in a way that has no equivalent in casino.
Sportsbook vs casino
A casino runs games of chance with a fixed mathematical house edge baked into each game - the operator's win rate is statistically certain over volume. A sportsbook trades on uncertain real-world events, runs a thinner margin, and carries genuine outcome risk on any single event. That makes a sportsbook lower-margin and operationally heavier, but it also brings high engagement around sporting calendars. Many operators run both and cross-sell between them.
Sportsbook vs betting exchange
A sportsbook is the counterparty to your bet - you are betting against the house. A betting exchange instead matches customers who want opposite sides of a bet and takes a commission on winnings. The sportsbook model dominates the market; exchanges are a smaller niche. For an operator, running a sportsbook means owning the pricing and the risk; running an exchange means running a marketplace.
What it takes to run one
A sportsbook needs a licence for each market it serves, a platform, a trading and risk capability (built in-house or bought as managed trading), payment rails, and compliance. The build-versus-buy decision on trading is the one that most shapes cost and risk. If you are weighing launching one, the full operator walkthrough is in how to start a sportsbook, and growing one is covered in how to grow an online sportsbook. For senior operator-side help on those calls, see the sports betting consultant page.