Sports betting appeals to the smart bettor because it is not a game with a fixed house edge where the casinos are raking off fixed percentage. Sports betting requires more skill than luck similar to live poker. You won’t win every time but the skilled handicapper has a huge advantage over the recreational bettor. Before going into more detail you need to understand how sports betting works. We will take a look at football where a point spread is involved. (Basketball also uses a point spread.)
The casino Sports books make their money on sports bets by collecting a commission on losing bets. This is called the Vigorish or Vig for short. The most common odds are 11 to10. This means that if you want to win $100 you are risking $110. For example you place a bet on the Giants at the casino sports book and pay $110. If the Giants win you collect $210 when you cash your winning ticket. If you lose your bet you lose the $110.
Ideally the Sports book would like to have the same amount of money wagered on the two teams playing. If the Giants are playing the Colts and they have one player betting on the Giants and one player betting on the Colts they would pay the winner $100 but collect $110 for the loser. This gives them a $10 profit so they really don’t care who wins as long as they have an equal amount bet on each team. To accomplish this they assign a line or spread to make the contest equally attractive for both sides.
The Point Spread
Many people believe that the point spread is the predicted margin of victory by which one team will beat another team. This is not true. The line is the handicapper’s prediction of what number will be required to split the wagering evenly on both teams. For this reason the line may change from the opening line to the line at game time. The Sports books goal is to have the betting as evenly as possible.
If the public is swayed by sentiment to bet on a certain team then the odds makers need to adjust the line to get some action on the other team. Otherwise the betting would be heavily lopsided. The general betting public reacts from the opinions of others. This is why you see so many people “Jumping on the band wagon” of a winning team.
For the sports books the line is flawed if it does not attract the same amount of action on both sides however from a smart handicapper’s point of view, the line is flawed when it does not compute to his predicted outcome of the game. A weaker team can actually become the favorite if public sentiment is with that team. When this happens the underdog presents a huge overlay for the seasoned handicapper meaning that the odds are in his favor. For example: Team A should be a 3 point underdog to Team B however The public loves Team A and are betting on them and the line moves to make Team A a one point favorite, then Team B becomes an excellent bet. This is the contrarian principle and why many smart handicappers go against the general betting public.