plawrence is the best source for a definitive answer. But, until he weighs in:
Horse and dog racing, and jai-alai, have pari-mutuel betting, in which the track or fronton protects itself by adjusting the odds according to how much money is bet on each horse, dog or player. If a lot of money goes down on a favorite, the track's computers adjust the payoff odds downward so that even if the favorite wins, the track will still make a profit on the race.
For example: Smarty Jones was such a heavy favorite at the Derby that the odds were 1-5. So, even if he'd won, Churchill Downs still would have made a profit on the race. Conversely, a longshot may have a big payoff--but the odds were calculated on how much was actually bet on that horse, so the payout won't result in a net loss.
But a bookie joint doesn't make the odds, nor calculate them based on money bet at the joint. A heavy bet on a favorite that wins, or a heavy bet on a longshot, can bust the book. That's why they lay off heavy action with others, who can balance their own books. In effect, it's a network that acts like a track, guaranteeing profits.