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A bookie places bets for customers, usually on sporting events. They also set odds and pay out winnings on behalf of other people. The bookie's goal is to maintain balance in the books by adjusting the odds as much as possible to maintain an even amount of people betting on a win or loss.
Yes, in two regards. In states where gambling is still illegal, a bookie is still required. What bookies do now though, is they give you access to an off-shore online account, let's say based in Costa Rica, where there are operators and the computer hardware.