Market Making Books vs Retail Books: Know the Difference

Two Very Different Business Models

Not all sportsbooks operate the same way. The two fundamental types, market makers and retail books, serve different purposes and offer different opportunities for bettors.

Understanding this distinction is one of the most important concepts in sports betting.

What Are Market Making Books?

Market making books (also called "sharp books" or "bookmaker books") originate betting lines and welcome sharp action. Their business model is built on volume and accuracy, not on limiting winners.

Examples:

• Pinnacle (largest sharp book globally)
• Circa (Las Vegas)
• Bookmaker.eu
• BetCRIS
• 5Dimes (historical)

How they operate:

1. Originate lines using sophisticated models
2. Accept large bets from professionals
3. Adjust lines based on where sharp money flows
4. Make money on volume and small margins
5. Don't limit winning players

The philosophy: if a bettor consistently beats them, that bettor has information. The book uses that information to sharpen their line, making it more accurate for everyone else.

What Are Retail Books?

Retail books (also called "recreational books" or "square books") target casual bettors and make money primarily by limiting winners while maximizing recreational losses.

Examples:

• DraftKings
• FanDuel
• BetMGM
• Caesars
• PointsBet
• Most state-licensed US sportsbooks

How they operate:

1. Copy lines from market makers
2. Add extra vig (margin)
3. Offer promotions to attract recreational bettors
4. Limit or ban winning players
5. Focus on revenue per customer

The philosophy: recreational bettors lose money over time. Keep them happy with promos and a good user experience. Remove anyone who threatens profitability.

Key Differences: Side by Side

Why This Matters for Your Strategy

Understanding the distinction shapes your approach:

If you're a winning bettor:

• Use retail books while you can (softer lines)
• Expect to eventually be limited
• Have market maker accounts for when retail limits you
• Extract value from promos before accounts are restricted

If you're developing your skills:

• Retail books are more forgiving to learn on
• Use sharp lines as your benchmark
• Compare your bets to Pinnacle prices to identify mistakes
• Track your CLV using sharp closing lines

If you're using +EV betting:

• Sharp books provide the "true" odds
• Retail books provide the "soft" odds to bet
• The difference is your edge

This is exactly what our +EV scanner exploits: identifying when retail books offer better prices than the sharp market.

Pinnacle: The Gold Standard

Pinnacle deserves special attention as the benchmark sharp book.

Why Pinnacle matters:

1. Highest limits in the industry
2. Lowest vig (often -104/-104)
3. Never limits winners
4. Sharpest lines in the market
5. Closing line is industry benchmark

The catch: Pinnacle isn't available in the US or UK. It operates in most other markets.

For US bettors: Circa Las Vegas serves a similar role domestically, with high limits and sharp lines.

Using Sharp Lines as Your Benchmark

The smart betting workflow:

1. Find Pinnacle's line (or consensus sharp line)
2. Remove the vig to calculate fair odds
3. Compare to retail books
4. Bet when retail offers better than fair value

Example:

• Pinnacle: Chiefs -3 (-106) vs +3 (-106)
• Fair price (no-vig): Chiefs -3 at -103 / +3 at -103
• DraftKings: Chiefs -3 (-105)
• DraftKings offers worse than fair value (no bet)

But:

• BetMGM: Chiefs -3 (+100)
• BetMGM offers better than fair value (+EV bet)

Our arbitrage finder and +EV tool automate this comparison across dozens of books.

The Promotional Advantage of Retail Books

While retail books limit winners, they offer something sharp books don't: promotions.

Common retail promos:

• Sign-up bonuses ($200-$1,500)
• Deposit matches
• Free bets
• Odds boosts
• Profit boosts
• Parlay insurance
• Referral bonuses

For +EV bettors, these promotions represent guaranteed value. The strategy is to extract maximum promotional value before inevitably being limited.

Account Longevity: The Trade-Off

Sharp books:

• Bet forever at full limits
• Never worried about restrictions
• But lower margins mean harder to find edge

Retail books:

• Softer lines and promos create edge
• But accounts have limited lifespan
• Eventually restricted to parlays and micro-limits

The optimal approach for most bettors: milk retail books for value while diversifying across many books, knowing each account has an expiration date.

Who Gets Limited and Why

Retail books limit based on:

Beating Closing Line Value (CLV) The #1 factor. Consistently get better prices than close? You'll be flagged.

Betting Patterns Only betting when you have large edge looks different from recreational behavior.

Sharp Line Following Betting immediately after sharp line moves signals sophisticated behavior.

Promo Abuse Extracting maximum value from bonuses flags you as non-recreational.

Correlated with Known Sharps Betting the same sides as known professionals triggers suspicion.

See our detailed guide on why sportsbooks limit bettors.

Betting Exchanges: A Third Category

Betting exchanges (Betfair, Betdaq, Smarkets) are neither market makers nor retail books:

How they work:

• Match bettors against each other
• Take commission on winning bets (2-5%)
• Don't care who wins (they're not on the other side)
• No limits on winning

Advantages:

• Often best odds available
• No limiting of winners
• Can back and lay (bet for/against)
• Often best for live betting

Disadvantages:

• Limited liquidity on some markets
• Not available everywhere (restricted in US)
• Can be complex for beginners

For markets with good liquidity, exchanges often offer the sharpest prices.

Practical Strategy by Bettor Type

Recreational Bettor: Use retail books. The promos and user experience are designed for you. Don't worry about the distinctions above.

Developing Sharp:

• Primary bets at retail books
• Track CLV using sharp lines
• Learn to identify +EV spots
• Diversify across many retail books
• Expect eventual limits

Professional Sharp:

• Most volume at market makers
• Use retail books opportunistically
• Extract promo value when available
• Accept that retail accounts are temporary
• Consider betting exchanges for liquidity

Geographic Considerations

United States:

• No Pinnacle access
• Circa is the domestic sharp book
• Focus on retail books (DK, FD, BetMGM, etc.)
• State-by-state fragmentation creates opportunities

Europe:

• Pinnacle accessible in most countries
• Betting exchanges widely available
• Many retail options for soft lines

Rest of World:

• Varies by jurisdiction
• Pinnacle often available
• Check local regulations

Key Takeaways

• Market makers (Pinnacle, Circa) originate lines and welcome sharps
• Retail books (DraftKings, FanDuel) copy lines and limit winners
• Sharp books have lower vig and higher limits but harder to beat
• Retail books offer softer lines and promotions but limited account lifespan
• Use sharp lines as your benchmark for finding value at retail books
• Promotions at retail books represent real +EV for smart bettors
• Account limiting is inevitable for winning bettors at retail books
• Betting exchanges offer a third option with no limiting but variable liquidity
• Tools like our +EV scanner exploit the gap between sharp and retail prices