Spread Betting for the Beginner
This week we turn our attention to betting the spread. The general purpose of spread betting is to create a market for both sides of a wager. In a sporting event a strong team may be matched up against a weaker team; almost every match-up has a favorite and an underdog. If the wager is simply a moneyline bet, as in “Who will win the game?” more bets are likely to be made for the favorite, possibly to such an extent that there would be very few bettors willing to take the underdog.
Another way to look at a points spread is to consider it the “margin of victory.” If the line for the Giants/Eagles game is Eagles -7, the sportsbook is essentially telling you they believe the Eagles are a touchdown better than the Giants. Your job as a bettor is determine whether the Eagles are in fact better by a touchdown, or if the Giants are closer to the Eagles talent wise than a touchdown
The wager becomes “Will the favorite win by more than the point spread?” The point spread can be moved as needed to create an equal number of participants on each side of the wager. This allows a sportsbook to accept wagers on both sides of the spread. The sportsbook charges a commission, or vigorish. This is where we get the term “vig.”
Sports traders set lines at sportsbooks. Because the spread is intended to create an equal number of wagers on either side, the implied probability is 50% for both sides of the wager. However due to the large number of events and lines each day you will rarely see one sportsbook’s lines vary widely from others. That is by design. Once an opening line is set, it’s likely used throughout various sportsbooks.
Basketball and football are high-scoring sports. Basketball and football have a wider range of score outcomes, so spreads will also be more varied. Spreads are less effective in lower-scoring sports like baseball, hockey, and soccer, but they still exist. Obviously, these sports don’t use points. It is called the run line in baseball, and in hockey, it is the puck line. Both the run line and puck line are generally set at -1.5 for the favored team. The more general term of spread is often used across all sports.
Lastly, if a team loses by the exact points spread, the bet is considered a push, the original bet is returned, and it is as if the bet never happened.