Get a huge bet on paul that you don't have offset? offer better odds on tyson till it balances. as a bookie your goal at the end of the day is to have the most total amount of bets on the book (say 1M in total wagers) where the money placed at the odds completely evens out so that at the end of the day you take 10% of 1 million for providing the market (the vig) and pay one set of betters with the other's money. In fact as the house you're just building creating your own arbitrage by inventing currency exchange rates.

Basically, the house takes their cut from all the bets. The house cannot lose. Then they share whatever's left amongst the winners.

The returns for a $1 bet on a horse are calculated in real time and displayed on the screens. THESE ARE NOT THE FINAL ODDS, they change as bets are placed right up until the race starts, which is the starting price (and where the term SP bookmakers comes from).

Contrast this with bookmakers at the track who offer fixed odds when the bets are placed. They stand a chance of losing if they get their numbers wrong.