A sportsbook is a gambling establishment that accepts wagers on sporting events and pays winners an amount that varies according to the likelihood of winning. It also imposes a fee on losing bettors and earns profit over the long run by accepting bets from those who correctly predict the outcome of a sporting event.

It is a business that entails risk, and the odds of winning are low for all but the most expert bettors. To make money, the sportsbook must pay winning bettors and cover overhead expenses. This can be accomplished by calculating the expected value of a unit bet and setting the odds so that the bettors will win more than their initial investment over time.

Historically, sportsbooks were limited to Nevada, Oregon, Montana, and Delaware until the Supreme Court struck down the Professional and Amateur Sports Protection Act of 1992. Today, many sportsbooks operate in shopfronts and online. Some specialize in major sports, while others take bets on pivotal world events such as the Oscars and Nobel Prizes. Some also offer what are known as novelty bets, such as the name of the royal baby.

In order to evaluate the impact of sportsbook bias on wagering accuracy, the empirical CDF of the median margin of victory was evaluated for deviations of 1, 2, and 3 points from the true median in each direction. A value was obtained for the expected profit on a unit bet and is shown in Figure 4. The results indicate that a sportsbook bias of only a single point from the true median is sufficient to permit a positive expected profit.