Sports bettors are obviously and understandably obsessed with the odds and lines that sports books post for them to bet. They are, after all, everything that sports betting is about. A lot of bettors don’t spend a lot of time thinking about where those lines come from, though. Understanding a little bit about the process can create real opportunities for bettors from time to time – and it can help them avoid costly mistakes. Here are three things that can help sports bettors to better understand the origin of betting lines:
1. This is somewhat oversimplified, but basically there are three different ways that sportsbooks come up with the lines that they post. The first and most common is that they use a service – Las Vegas Sports Consultants is the most common one – to guide them. LVSC and others set lines on games as early as possible using computer power ratings as a basis for their work with adjustment as they see fit. Once the books get those lines they may adjust them themselves, but they can’t too much – if they adjust them and other books don’t then they will get a rush of action that they may not want.
The second way that sportsbooks set lines is by doing it themselves. This is more common in sports where the timeframe is short and they need quick decisions, or when they are setting odds for obscure events or offering unusual prop bets.
Finally, some books set lines just by following the leaders – seeing what other books do and how the early bettors respond and make their decisions from there. These are books that don’t attract the early bettors as part of their business model.
2. The sportsbooks’ goal is not to be right. Many casual bettors assume that sportsbooks are trying to predict the outcome of the game with their lines. That’s far from the truth, though often times they turn out to be quite accurate. The actual goal of the bookmakers is to set a line that lets them collect balanced action on both teams. Because of the juice sportsbooks are guaranteed to make a profit if they have the same amount of money bet on both teams. It’s important to note here that we are not talking about having the same number of bettors on both sides, but rather the same amount of money.
Often times the books know they aren’t likely to be able to balance the action before they even start taking bets on a game. Their job, then, is to set the line and adjust it as needed so that the amount of risk that they are forced to take in a game is acceptable to them. To do this the books need to make educated guesses about two things – how the public is likely to bet, and how the smart money (basically the high money, professional bettors) are likely to bet. The worst case scenario is that the books set a line in which both the public and the smart money favor one side. In that case the large majority of money will be on one side. That means that the books could make a huge profit if the other side covers the spread, but they would lose money if the popular side covers. The books, then, are essentially gambling is a case like that, and books hate to gamble. The goal of setting a line, then, is essentially to find the spot where the betting public and the smart money are likely to have different opinions. The smart money isn’t always easy to figure out, but the betting public is generally quite predictable, and books will often set the lines by adding a point or two to the side that the public is likely to be on to bulk up their margin for error. Once they have set the lines they will quickly get a sense of whether they are right or not and can then adjust the line as they need to. Setting lines has a scientific base to it, but it is definitely an art.
3. The timing of events affects the point spreads. The amount of time between games in different sports, for example, makes the way lines are set very different. In the NFL the lines for the next week’s games are set on Sunday night soon after the previous games are finished. They have a full week to be looked at, bet up, bet down, and adjusted as need to. Sportsbooks can never afford to make big mistakes, but the amount of time they have in football, and the fact that the public typically doesn’t bet until closer to the game time, means that the books have time to adjust a spread to get it right if it isn’t quite right to start. In basketball, baseball, or hockey the line is typically set just the night before the game, and many books don’t release their line until the morning of the game. The shorter time frame means that there is less time for the books to react and adjust, and that can mean that mistakes that are made can be more accessible for more bettors than they are in football. The shorter the time between the posting of the lines and the start of the game the more vulnerable the books can be, and the better the chance that an astute amateur bettor can find an opportunity to grab real value. At the extreme, things like halftime bets are a real opportunity because the bookmakers only really have one chance to get things right, and on busy days they have to get several lines right at the same time.