To the uninitiated, trying to gain a basic understanding of the sports betting market can be daunting. In contrast to the stock market, for which ample information and resources are readily available to novice speculators, the same isn’t true of the sports betting market. But that’s not to say the basics aren’t rather easily digestible.
In order to develop a working knowledge of the sports betting market, the first step is to identify its core components, which include bookmakers, professional bettors and syndicates, and recreational bettors. Combined, those entities represent the lifeblood of the market. Understanding how those forces coexist and counterbalance one another is the complicated part, and since there’s enough there to merit its own thesis topic, we’ll simplify it by highlighting 5 useful nuggets.
1. Opening betting lines are established offshore
One common misconception is that Las Vegas represents the Wall Street of the sports betting market, when in fact it’s the offshore sportsbooks that serve as the underlying forces driving the market. Pinnacle, which operates out of Curacao, is widely regarded as one of the most respected sportsbooks in the world because of its crazy low margins and status as a market-setting book (BetCRIS, headquartered in Costa Rica, is another).
The lines set by books like Pinnacle and BetCRIS are used as barometers of the market by other bookmakers in the industry, which is to say Nevada sportsbooks frequently mimic those sharper offshore numbers.
2. Betting lines are not intended to be predictive
Lines are established as a reflection of anticipated market reaction and NOT anticipated game outcomes, a critical distinction. Bookmakers employ a general philosophy of seeking balanced action on either side of a number, as they create their margins (which range on average from 5-10 percent) via the vigorish (or “juice”) they attach to a bet.
With that said, bookmakers are in the gambling business for a reason, and they will often take a position on one side of a number if they don’t respect the source of the money (read: public bettors) fueling the imbalance on the other side.
3. Bookmakers and pros play a perpetual game of cat-and-mouse
Another common myth is that professional money in the market outweighs public money in terms of sportsbook handle; that’s only true for lower-profile action like mid-major college basketball (a preferred choice of pros). What is true is that bookmakers respect the positions of pros and will therefore do everything they can to avoid assuming a high liability on some of those positions. In order to accomplish that they may impose limits on the amount of action they’ll take from certain sharp bettors or refuse their action all together.
The pros, meanwhile, are always trying to mask their positions — whether through spreading out their bets across properties or by placing de facto bluff bets aimed at tricking oddsmakers into moving a line in a desired direction so they can hammer the adjusted (and preferred) price with much heavier action.
4. It costs a premium to bet favorites and overs at most sportsbooks
As opposed to respected sharp books like Pinnacle — the loss leaders of the industry — most bookmakers cater to recreational bettors (or “squares”), who wager primarily on public teams, favorites and overs. Because of that, many sportsbooks will intentionally increase the price on what they know will be public sides and totals — whether via a higher vigorish or an extra half-point attached to the public side — in order to increase their margins.
Also known as “line shading,” this practice is part of what enables pros to consistently make bets containing what’s known as “positive expected value” (positive EV).
5. Consistently beating the closing number is what distinguishes pros from joes
If a line opens with Team X as a favorite of 3.5 points and closes with Team X as a favorite of 4.5 points, any bettors who got down at -3.5 will have officially “beaten the closing number.” That equates to a positive EV bet because anyone who bet Team X at -3.5 succeeded in getting ahead of the market by ensuring that a final margin of 4 points would be a winning bet for them. Conversely, that margin would become a losing bet for anyone who didn’t get the best of the number.
Because the concept of “key numbers” represents such a critical element of handicapping the sports betting market, correctly predicting how the public will get involved is the clearest indicator of sound market awareness — not to mention a surefire strategy for long-term success.