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Why do Betting Lines Change?

September 30, 2010 by  
Filed under General Information

We have already seen in previous articles like How do Sportsbooks Make Money on the Moneyline, that sportsbooks get their profit by taking an equal amount of bets on both teams in any given game. The income from the losing bets offsets the payouts from the winning bets, and the “vigorish” or “juice” is the sportsbooks profit. And we have also seen that (-110) is the standard “vig”, although not the only one. Point spreads and moneylines are set carefully with the hope that they will entice bettors to wager on both teams equally. So why would a sportsbook change these carefully calculated numbers after they have been posted for the public to wager on?

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The reason is that these betting lines are only the oddsmakers best guess about what kinds of odds will result in the equal distribution of wagers on both sides of an event. And while oddsmakers are very good at making these guesses, nobody can perfectly predict how the public will respond. Let’s say that the betting lines come out for an NFL game between the Washington Redskins and the Dallas Cowboys, and the Redskins are +3 in the point spread. Let’s say further that for some reason a lot of people believe that the Cowboys will cover the spread easily, and in fact will win the game by 6 or 7 points, and they start betting heavily on Dallas.

Right away this causes an imbalance in the wagering patterns with a lot more money being placed on Dallas than on Washington, and that, as we know is contrary to the outcome that the sportsbooks are trying to achieve. This isn’t something that the sportsbooks like, but it certainly doesn’t come as any surprise to them. And neither is it any great cause for alarm either. It is simply an indicator that the betting lines need to be adjusted to persuade more bettors to lay money on Washington.

To do this, the sportsbooks will start increasing the point spread from 3 points to 4 or 5 or 6 points or whatever is needed to prompt the public to start betting on the Redskins. These adjustments are made very quickly by the sportsbooks and they will not stop moving the betting line until they get the desired result. Once equilibrium is established and wagers on both teams are as equal as they can be, the betting line stops moving. It will probably remain at that value which resulted in equilibrium unless some event occurs that causes the balance to be upset, in which case another adjustment is made.

When betting on NFL or NCAA football, several things can happen to make this adjustment necessary. A lot of this has to do with the fact that football games are held just once a week. Injuries may occur while players are practicing and this will affect the betting lines that were created earlier in the week. Weather forecasts change as time goes by and this also has an effect. The prospect of a sloppy, rainy day on a muddy field for example encourages betting on the team that can run the ball more effectively since bad weather hinders the crisp routes and split second timing needed for a successful passing attack.

There is at least one other major reason that the line is subject to change for football games and it again has to do with the weekly schedule. The line may change markedly on game day in response to high betting volume by last minute customers. On game day, all the information needed to evaluate a team’s chances of winning are in place. Weather predictions are at their most accurate. Injured or questionable players are as healthy as they are going to get and coaches will usually give an indication of whether these players will see action.

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In some cases other football games are taking place (or have already been played) on the same day that affect the importance of other games, especially near the end of the season. A team that has been knocked out of contention for the playoffs by the results of another game earlier in the day is not likely to be as motivated to play as an opponent who is fighting for its post season life and must win to stay in the hunt.

The result of all these elements is that betting on one team may become very heavy in the time period just prior to the game. A sportsbook will make whatever changes are required to the betting line to offset this massive influx of bets by making bets on the opposing club very attractive. They will continue to adjust to the wagering conditions right up until kickoff.

How is the Betting Line Created?

September 14, 2010 by  
Filed under General Information

Theoretically anybody can create a betting line. All you have to do is set a point spread, a moneyline and an over/under, and then attach odds to each of those betting types. But in reality the process of creating betting lines on competitive sports in such a way as to make money for the sportsbooks is so unbelievably complex that very few can do it well. As a result, there are really only two sources of betting lines for sporting events.

The US source is a company called Las Vegas Sports Consultants (LVSC), and they have been in business since 1982. A more recent arrival to the field is the offshore sportsbook Costa Rica International Sports (CRIS). CRIS was established in 1985 and over the next several years they grew and began competing with LVSC in the arena of creating betting lines. These two organizations combined provide betting lines for virtually every sportsbook and bookie on the planet.

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You may recall in the previous section titled How do Sportsbooks Make Money on the Point Spread that we described the point spread as the number of points that the favorite is expected to win by when playing the underdog. In truth a large part of the betting public may actually believe that the favorite will beat the underdog by the number of points listed in the spread. But to hear this and then conclude that the point spread posted by the oddsmakers is meant to reflect the expected point differential is to completely miss the truth about how and why betting lines are created.

LVSC and CRIS do not set betting lines based on the expected difference in score between two teams. They set the lines so as to create equal amounts of betting on both teams. And as intricate as the creation of betting lines can become, both LVSC and CRIS create their lines using the same basic types of information. Some of the factors that go into the creation of betting lines are home field advantage, injury reports, the history of meetings between the two teams, public preference, and of course the power rankings which are themselves the product of a whole array of statistical data.

Power rankings (also called power ratings) are the cornerstone of the betting line. They are a list of all the teams competing against each other in any given sport, and the teams are ordered on the list according to which has the higher power ranking. The higher a team’s power rankings, the closer they are to the top of the list. The assumption is that for any two teams which play each other, the team with the higher ranking is likely to win. In fact, many sports handicappers believe that a comparison of the power rankings between two teams can predict the outcome of a game between those teams much more reliably than the point spread.

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Power rankings are calculated using a complicated formula combining many stats such as the win/loss percentage of a team’s opponents, the team’s average scoring margin, and the number of home games and road games on the team’s schedule. They are published by many different sources but the most widely accepted rankings come from media providers such as major broadcasters, nationally distributed newspapers and magazines. Every provider has their own specific formula for creating these rankings, and some of these formulas are actually posted for the readers.

But the power rankings are just the beginning of the process. All sorts of other information must be taken into account and processed. Injuries to players can have a dramatic effect on the odds, especially if the injured player is in a key position like quarterback or is otherwise one of the standout players on the team. And regardless of how the two teams match up against each other in reality, the public may bet heavily on one team simply because that team is popular and well liked. In such a case the sportsbooks will need to offer attractive odds on the opponent so as to encourage more people to bet against the popular team.

Betting lines which originate from LVSC and CRIS soon make their way around to the hundreds of online sportsbooks that populate the internet. But just because the major creators of betting lines post certain point spreads or moneylines doesn’t mean that every sportsbook has to copy them precisely. Indeed, many individual sportsbooks may use the Vegas and Costa Rica betting lines as a starting point, but the sportsbooks have very competent oddsmakers of their own who can tweak the established lines in an effort to maximize the sportsbooks profits.

How do Bookmakers Make Money?

September 8, 2010 by  
Filed under Tips & Tricks

In general a bookmaker or “bookie” is someone who takes wagers on sporting events and who operates at a local or regional level. He is someone who is living in your neighborhood, or is at least close enough to be dealing with the same population group on a more or less consistent basis. He knows his customers fairly well, perhaps on a first name basis, and knows the betting patterns of the people he does business with.

In contrast to sportsbooks, bookies are typically not the ones who come up with all the betting lines. Bookies usually adopt betting lines that have been published by sportsbooks and then take bets using those odds. They do this because the creation of an entire set of betting lines is a task that is too sophisticated for the average bookie to handle. This doesn’t mean however that the bookie is not allowed to set his own betting lines. In fact bookies often depart from the sportsbooks odds significantly when they feel it can make them more money. But the odds published by Vegas sportsbooks or online sportsbooks are usually the starting point for the bookie.

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Bookies try to make their money the same way the sportsbooks do. They take action on both teams and make money on the standard (-110) wagering odds. But bookies are usually small operations compared to a sportsbook. That gives them the ability to adjust quickly to market conditions and to charge different customers different rates. And that’s where bookies can increase their income.

Many bookies will adjust the point spread in their favor based on their location. If located in or near a big city for example, a bookie can be reasonably sure that a lot of people are going to bet on the local team. They therefore change the point spread and make it more difficult for the home team to cover. This practice is sometimes known as “shaving points” and is very common.

Consider a bookie who lives in Chicago. He knows that during football season a lot of bets will be placed on the Chicago Bears when they host the Green Bay Packers because the Bears are a home town favorite. As an example let’s say that most online sportsbooks are listing the Bears as 3½ point favorites over the Packers, so the Bears might be shown as -3½ (-110) meaning that you risk $110 that the Bears will win by 4 or more points. A Chicago bookie however might push the point spread to 4½ points. And bookies will adjust the odds for all kinds of wagers, not just the point spread. If the money line were (-110) as in the above example, a Chicago bookie might push it to (-130) or (-150).

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Dealing with a local bookie can have advantages as well as disadvantages. For one thing, bookies usually don’t require that you pay the money up front when you are placing a bet. That’s not a problem if you win, but it can create a situation where some people bet more than they have to spend, and if their bet loses the scene can be uncomfortable. Another thing about using a local bookie is that he may get to know your betting patterns. If you consistently bet on the favorites, your bookie may pick up on this and offer a deal that’s worse than you could find at any sportsbook.

On the positive side, getting to know a local bookie can also get you better deals than you might find at a sportsbook if you are a good customer. To keep your business the bookie may offer you slightly better odds than the usual betting lines. And since bookies have the flexibility to offer deals on a case by case basis, don’t be afraid to ask him which team he needs more bets to be placed on. If it turns out that he needs more bets on the team you want to wager on, he might very well give you better odds in order to close the deal.

Sports Betting – Handicapping

September 7, 2010 by  
Filed under Tips & Tricks

Handicapping is very simply the attempt to predict the outcome of sporting events. And though we include this article on handicapping in a section that is dedicated to outlining winning strategies for sports betting, the sad fact is that many handicappers offer a losing strategy. When it comes to handicappers, or “touts” as they are sometimes called, oftentimes your winning strategy is to recognize how many of them are fraudulent. This article will show you just how to do that, and conversely how to recognize a good handicapper.

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Sports betting is a big money business and as you might expect wherever you find big money you find con artists. Out of the 3000 or so handicappers working in the US these days only a very few are experienced, knowledgeable sports analysts with good records in picking winners. The number of handicappers continues to grow almost daily, and most of them use the same old tricks to get hold of your money. There are probably a hundred different ways these scam artists try to sucker you out of your cash but their methods usually fall into three most common practices. Those three schemes are; claiming an unrealistic winning percentage, using high pressure sales and giving picks for both sides of a game or series of games.

Claiming a 70% success rate – For some reason, a lot of touts have settled on 70% as a nice round number to advertise as a success rate for their sports picks. For an even more mysterious reason, a large segment of the betting public seems to believe them. If you have read even half of the articles posted on this website you know that the number of factors that can influence the outcome of any given sporting event are varied and any one of them can completely upset the odds. For anyone to claim that they can consistently pick sports winners in 7 out of every 10 games under these conditions is just too absurd for words.

We have already seen that the most profitable sports bettors got that way by Bankroll Management and by making conservative picks in order to achieve a solid 55% winning percentage. Perhaps you have dug yourself a hole by betting too much on a single game or by failing to secure the proper odds from the available betting lines. Do yourself a favor and don’t compound your mistake by chasing after lost money while clinging to a hope that your handicapper can predict winners at a rate never before accomplished in the history of sports betting. If he really could pick 70% winners he would be betting on his picks, not selling them to you.

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High Pressure Sales – You may have seen advertisements for free sports picks on an 800 number. They may boast about having a great success rate or having the inside track on some information that will guarantee them to win some particular game. But what’s much more likely is that they are a shop with a bunch of sales agents who don’t have any better ideas about who will win this weeks Green Bay Packers game than you do. If you are going to be honest with yourself you probably need to admit that when you are out looking for free picks you have probably had a run of losses and are trying to get some of that money back. In such a situation you may well grasp at what these guys are selling.

The worst part of this scenario is not simply that you have spent money on a product that is basically worthless, it’s the aftermath. Even if you decide that the service was a rip off and you are determined never to speak to them again, they have other plans in mind. Often as not they have sold your contact information to a network of touts as unreliable as they are. Or they might call you using a different name and try to get more money out of you. You might actually have to disconnect your phone in order to get rid of them.

Picking both sides of the line – This is one of the favorite tricks used by no talent handicappers. Let’s say that the Bears are playing the Chiefs this weekend. When someone calls in looking for a free pick, these scam artists will tell half their callers that the Bears are guaranteed to win. Then they will tell the other half of their prospects that the Chiefs are guaranteed to win this one. The group that loses their bets will be angry but will not be able to do much about it except promise themselves never to call these crooks again. But the other half of bettors will win their bets and they may now believe that this service is the best thing since sliced bread. Now they are willing to pay hard cash for the next pick, and they will do so long as they are in the winning group. The handicapper meanwhile just keeps churning the incoming calls into more money while offering absolutely nothing of value.

The bottom line is that if a handicapper’s promises look too good to be true they probably are. If you really must seek out a handicapper to get your picks, make sure and find one who is honest. Look for realistic percentages and also for facts about how the games are analyzed. If you see reasonable assumptions based on player performance and power rankings factored into a handicappers picks then you are probably on the right track.