The anatomy of a betting line and why it matters

Let's run through some of the basics of sports betting.

Super Bowl Ticket Drop

Welcome to the glorious world of sports betting. Sports betting has already been legalized in 22 states, and 18 additional states are expected to join them by the end of 2021. It won’t be long until full online sports betting is the norm across the US.

If you’re looking to get in on the action, it can be a little intimidating at first. There are many different bet types and a variety of different numbers that go into each bet. Let’s run through some of the basics.

What is sports betting?

Sports betting is the act of wagering on the outcome of a live sporting event. These events include all the major sports — football, basketball, baseball, hockey, soccer, boxing, MMA, etc — and can also include niche sports like darts, table tennis, and Esports. Some sportsbooks even offer the ability to wager on non-sporting events like the Oscars and presidential elections.

What is a betting line?

Rarely in sports are two teams evenly matched on the field. One team is often better than the other — aka “the favorite” — while the other team is considered “the underdog”. There are two main ways oddsmakers look to create a level playing field between uneven teams: the point spread and the moneyline.

The Point Spread

The point spread is the great equalizer in sports betting and is most commonly found in football and basketball wagering. It assigns a number — also known as the “spread” — to both the favorite and the underdog.

Let’s look at an example. In Super Bowl LIV, the Kansas City Chiefs were considered slight favorites over the San Francisco 49ers. As a result, the sportsbooks set the spread at 1.5 points, so the betting line looked like this:

Kansas City Chiefs (-1.5) vs. San Francisco 49ers

This means that if you bet the Chiefs on the spread, they would need to win by at least two points in order for you to win the bet. If they only won by one point or lost the game outright, your bet would be a loser.

On the other hand, a spread bet on the 49ers would win if they won the game outright or lost by just a single point. That is the benefit of betting on the underdog: They don’t need to actually win the game on the field in order for you to win your bet.

The spread in that game didn’t matter much because it was small, but it can be vital in other contests. The most common NFL spreads are three, four, and seven points, which coincide with the most common scoring differentials in NFL games. That said, the spread can get even larger in games that are huge mismatches, occasionally surpassing 60 points in certain college football contests.

If a game ends exactly on the point spread — i.e. a three-point favorite wins by three points — it is considered a “push” and the bet is graded as no action. That means your original wager is returned to you regardless of whether you bet on the underdog or the favorite.

Buffalo, New York, USA; Washington Capitals left wing Alex Ovechkin (8) during a stoppage in play in the first period against the Buffalo Sabres at KeyBank Center. Mandatory Credit: Timothy T. Ludwig-USA TODAY Sports

The Moneyline

The moneyline is the most common form of betting in most sports, and it is available in football and basketball wagering as well. The moneyline looks to address the inequalities between two teams by placing different odds on the favorite and the underdog. This means you will have to bet more money on the favorite than the underdog to win the same amount.

Let’s go back to Super Bowl LIV and look at a hypothetical $100 wager on the moneyline. The Chiefs were favored in that game, so their moneyline odds were around -120 (this number can differ depending on which sportsbook you’re using). -120 simply means that you have to risk $120 if you want to win $100. So if we risked our hypothetical $100 on the Chiefs, we would win $83.30 in the event of a Chiefs victory.

The 49ers were the underdog in that contest, so their odds were listed as +110. The plus number functions as the exact opposite to the minus number. Instead of risking $120 to win $100 like you would with the Chiefs, risking $100 would win you $110 if the 49ers were able to pull off the upset.

These odds — also known as “vig” or “juice” — provide extra incentive for betting on the underdog if you believe they can win the game outright.

That said, there is no safety net if you bet an underdog on the moneyline. If your team loses the game, you lose the bet. There is no point spread to potentially save you, which is why you are rewarded with additional money if the underdog wins.

How are the betting lines created?

There are a few key factors that go into the creation of betting lines.

The initial lines are created using the oddsmakers’ “power ratings”. Each team is assigned a baseline number that reflects how much better or worse they are than average. For example, a good NFL team like the Chiefs might be considered seven points better than average, while a poor team like the Bengals might be seven points below average. Therefore, if those two teams were to meet, the baseline spread would be set at approximately 14 points.

Home field advantage is also something that gets reflected in the betting lines. In the NFL, home field advantage is typically worth around three points, while certain teams with excellent home environments get a slightly larger boost.

Home court advantage varies a little more in basketball. Teams with an excellent home court advantage like the Utah Jazz or Denver Nuggets can get a boost of more than four points, while other teams might get as little as two.

Setting a line is more of an art than a science, and there are additional factors that have to be taken into account as well. Public perception is a big one. If the sports book expects heavy action to come on one side of a particular game — like in the previous example with the Chiefs playing the Bengals — they might set the line a little higher than the power ratings and home field numbers suggest. They know the public is going to bet the Chiefs regardless of whether they set the spread at -14 or -17, so they can inflate the number in that situation.

Injuries, weather, potential impact on the standings, and the previous head-to-head matchups are also factors that can impact the point spread and moneyline odds.

What is line movement?

The point spreads and moneyline odds are typically set well in advance of any given sporting event, but the lines rarely stay stagnant. They are susceptible to change for a variety of reasons.

The most obvious reason is a key injury that was not known before the line was initially set. For example, if LeBron James gets an unexpected rest day, you can expect the line in the Lakers’ game to swing pretty heavily in the other team’s favor.

The other most common reason for line movement is when an overwhelming majority of bets come in on one side of a game. If 90% of the public is betting on Team A as a three-point favorite, it would not be surprising to see that spread rise to 3.5, 4.0, or possibly even higher.

Occasionally, the line will move in the opposite direction of the public. This is called “reverse line movement” and its occurrence is typically an indication of professional bettors — aka “sharps” — hammering the contrarian side of a game.

Let’s look at a hypothetical example. Let’s say that the Lakers are playing on the road against the New York Knicks, and the sportsbooks set the initial line at Lakers -10. The public is unsurprisingly pounding the Lakers, but the line ultimately drops to Lakers -9 before tip off. This would definitely qualify as reverse line movement.

In situations like this, it’s important to examine the ticket percentage vs. the money wagered percentage on a given game. Each wager counts as one bet toward the bet ticket percentage, but the amounts of those wagers can vary drastically. Recreational bettors might be wagering $20 on a specific game, but a professional bettor might wager $20,000. That difference is going to be reflected in the money wagered percentage.

Let’s go back to our hypothetical example. If the sharps are indeed backing the Knicks, that money wagered percentage is going to look a lot different than the ticket percentage. Those large bets on the Knicks are enough to balance out the action for the sportsbook, and they will ultimately move the line to avoid getting beaten badly by the professionals.

Line movement and reverse line movement can be tracked on the moneyline as well.

When should you bet?

Since the lines are constantly moving, how do you know when you should place your bet? Getting the best number whenever possible is vital to success as a sports bettor for a few key reasons.

Beating the number

“Beating the number” is a pretty simple concept. Essentially, you want to make sure that you are getting “closing line value” whenever possible.

For example, Let’s say that you bet a three-point NFL favorite early in the week, and they end up closing as four-point favorites before kickoff. In that case, you would have beat the number to the tune of one-point of closing line value.

That may not sound like a lot, but consistently beating the number is a good way to ensure profitability over the long run. Plenty of professional bettors care more about beating the number than actually winning the bet because that means that their long-term process is sound.

Unfortunately, there is no exact formula to ensure that you’re getting the best of the number. That said, the general rule of thumb is that you want to bet favorites early in the week because those teams are likely to be heavily bet by the public. 

Monitoring the bets vs. dollar differential can also provide a hint for potential spread movement. The books and sharps typically like to be on the same side, so any team receiving professional action has the potential to see the line move against them.

Middling

Another reason why bet timing is important is because it opens up the possibility of “middling”.

Lets say you grab a team as a three-point favorite early in the week, but the number has increased to six right before game time. You’ve done a great job of beating the closing number, which opens up an interesting proposition. You can choose to ride out your current bet — which is fine in this situation — or you can shoot for a middle.

Basically, what that means is that you would now target the underdog at +6 even though you initially bet on the favorite. The worst case scenario is that one of those bets will lose and the other will win, so you will only lose the juice on one of those wagers. On the other hand, there is a possibility that you can win both wagers at the same time.

Lets go back to our hypothetical example. If you bet on $110 on Team A as three-point favorite and Team B as a six-point underdog at the standard -110 odds, there are five possible outcomes:

  • Team A wins by seven or more — Bet one wins, bet two loses: -$10 profit
  • Team A wins by exactly six — Bet one wins, bet two pushes: $100 profit
  • Team A wins by four or five — Bet one wins, bet two wins: $200 profit
  • Team A wins by exactly three — Bet one pushes, bet two wins: $100 profit
  • Team A wins by two or less or Team B wins outright — Bet one loses, bet two wins: -$10

Simply put, this middling opportunity means you’re wagering $10 for the chance to win $200. Sounds pretty appealing, right?

Ultimately, you aren’t going to hit your middles all that often, but they are still low-risk wagers with plenty of upside.

Rickie Fowler tees off from the 15th during the third round of the Rocket Mortgage Classic golf tournament at the Detroit Golf Club in Detroit, Saturday, July 4, 2020.

Types of bets

You’ve done your research. You’ve monitored the betting activity. You’ve studied the line movements. You’re finally ready to place your wager, so what kind of bet should you make? There are a few different options available to you.

Straight Bet

This is the most common type of wager, focusing on just a single game. Straight bets can be placed on the spread, the money line, or even the “over/under”. The over/under is a bet on the total number of points or runs scored in a particular game instead of wagering on a side.

Parlay

A parlay provides bettors with an opportunity to increase the payout on their bet. Instead of wagering on just one game, a parlay allows you to combine bets on multiple games or events. 

Let’s say that you like three games for an NFL weekend. Instead of wagering on all three games separately, you can opt to put them in a parlay. A three-team parlay typically pays out at approximately 6:1, so a $100 bettor has the potential to win $600. That said, all three teams need to win in order for you to win your bet. If just two of your teams win, you get absolutely nothing.

Parlays are available with the spread, moneyline, or over/under, and you can mix and match between them when building your bet. The more separate bets you include in your parlay, the greater the payout if you ultimately win. Betting calculators are available if you’d like to find out how much a parlay would potentially net you.

One thing to keep in mind is that most sportsbooks will not allow correlated parlays. That means that you can’t bet on the Chiefs spread and moneyline in the same parlay since it’s not possible to win one without the other.

Teaser

A teaser works very similarly to a parlay. It’s a bet that features multiple teams, and you need to win each individual bet in order to win your teaser.

The main difference between a parlay and teaser is that a teaser includes a few additional points of spread value for each of your wagers. For example, if you want to bet on three 10-point favorites in the NFL, a seven-point teaser would allow you to group all three of those teams together as just three-point favorites.

Unfortunately, those points are going to cost you. In the parlay example, a three-team wager would net you a 6:1 payout. A three-team NFL teaser with each team getting seven points is approximately -150, so betting $100 would win you just $66.70.

Prop Bets

Betting on sides or totals isn’t for everyone, and that’s where prop bets come in. Prop bets allow you to wager on specific outcomes within a game and are available in most sports. For example, you can wager on whether or not a quarterback will eclipse a certain number of passing yards, how many strikeouts a pitcher will rack up, or whether or not a basketball player will record a triple-double.

When it comes to prop betting, the Super Bowl is a national holiday. You can bet on absolutely everything in the game and the festivities that surround it. You can even bet on trivial things like how long it will take to sing the National Anthem and what color Gatorade will be dumped on the winning coach.

Regardless of how you plan on betting, there is something out there for everyone. Here’s to a fun and profitable new hobby!

Super Bowl Ticket Drop