When betting on sports, gamblers are typically presented with two general types of straight or single wagers, wagers made on one team or side. The first type of single bet is made with fixed odds. Fixed odds betting is usually reserved for sports with very low scoring and frequent small point differentials. European football (soccer) and America’s Major League Baseball are great examples of sports where a favourite is identified as the one with the lowest fixed odds. The objective for the gambler is to simply select the team they believe is going to win while the odds will generally reflect the difference between each team’s prowess.
The other type of single wager is made with a point spread in place. This is typically referred to as “spread betting.” In sports leagues where lots of points are being scored and the point differentials can be substantial, the bookmaker needs a more effective way of bringing the teams closer together in betting value. If a heavy favorite were expected to trounce another team, the obvious bet for a gambler would be on the favorite. If the bookmaker were to post odds on a heavy favorite, the amount the bettor would have to lay could be high enough to make the risk disproportionate to the reward. There would also be a chance all of the action would come in on the favorite, creating a substantial risk for the bookmaker.
When Spread Betting is used
Much like there are sports that are better suited to fixed odds betting; there are several sports where spread betting is almost necessary. In popular sports like Rugby, Aussie Rules Football, Cricket, American football (pro and college) and basketball, the favorites would have a substantial advantage in a game where they were expected to win by a substantial number of points. That’s when the bookmaker can step in and become the great equalizer by posting a point spread that makes the winner less obvious.
Example: In American college football (NCAA FB), the disparity in talent between two teams can be significant for a number of reasons, including injuries, recruiting capabilities and enrollment limitations. If 2016-17 NCAA Football Champion Clemson Tigers were to play a team like Prairie View; most experts would expect the Tigers to win by at least 45 points. The fixed odds would be a crazy number like -7000 to win 100. With that said, the certainty of the Tigers winning the game would be so high that most people, with money, would lay the bet and most assuredly win. If everyone were allowed to bet this way, the bookmaker would have very little chance of winning. Instead, they are going to post a line of Clemson -45. If Clemson backers have to lay 45 points, the game, from a betting perspective, starts to look very different.
Explaining How Spread Betting Works
When the online betting sites posts a game using a point spread, it will usually look like this:
Clemson -45 -110
Prairie View +45 -110
The bettor has a choice to make. They can bet on Clemson and lay 45 points, or they can take Prairie View and take the 45 points. If the final score were to end with Clemson winning 56-7, the results of the wagering would be figured as follows:
Clemson scores 56 points, subtract 45 for the point spread and the result ends up being 11 for Clemson and the same 7 for Prairie View, making Clemson the winning side. Theoretically, the result could also be determined by adding the 45 to Prairie View’s score, resulting in a final score of Clemson 56 and Prairie View 52.
Now, let’s use a different scoring scenario. The final score ends up Clemson winning 49-7. Clemson scores 49 points, subtract 45 for the point spread and the result ends up being 4 for Clemson and the same 7 for Prairie View, making Prairie View the winning side.
Regardless of the sports, this is how point spread betting effectively makes teams equal in betting value. Looking again at the point spread posted by the bookmaker,
Clemson -45 -110
Prairie View +45 -110
The -110 next to the actual point spread represents the betting odds for the bet. On both sides of the game, the betting odds are –110. This number represents pretty typical betting odds on a single bet with a point spread. It means the bettor has to bet 110 to win 100 no matter which side they bet on. The difference between the bet amount and the win amount is the bookmaker’s commission for booking the bet.
Ultimately, a bookmaker’s job is to book equal bets on both sides of a game in an effort to balance the books. If they can effectively balance the books, they will have little to no vested interest in the game and end up collecting commission. A perfectly balanced game is a rare occurrence, but when it happens, the bookmaker will collect a commission of 4.55% on the total amount wagered regardless of which team wins.
Example: Using the line stated above, let’s say 55,000 to win 50,000 is bet on Clemson -45 and 55,000 to win 50,000 is bet on Prairie View +45. The bookmaker has collected 110,000 on both sides combined. With betting odds of -110, the results would fall as follows.
If Clemson wins by more than 45, the bookmaker would pay Clemson bettors 105,000 (55,000+50,000), leaving a 5,000 profit (110,000 – 105,000 = 5,000 profit).
If Clemson wins by less that 45, the bookmakers would pay Prairie View bettors 105,000 (55,000+50,000), leaving a 5,000 profit (110,000 – 105,000 = 5,000 profit).
In both cases, the bookmaker took bets of 110,000 and earned a commission of 5,000 or 4.55% for doing so. This was done with absolutely no risk to the bookmaker.
For the record: If Clemson wins by exactly 45, the game is a tie or push and all monies are returned. In order to avoid possible ties, bookmaker’s can include an extra .5 points on the line, making a tie result impossible.
As a gambler, it’s important that you familiarize yourself with both types of betting. This will give you great comfort no matter which sports you decide to use to help build your bankroll.