Although simple on the surface – theoretically, you’re guessing which one of two or more competitors will succeed – sports betting is a complex area where the details can vary significantly for each sport. So, how does sports betting work? Let’s take a closer look at the details.
Placing Bets: Sportsbooks
Most sports bets go through a sportsbook, which is a location that accepts bets on events and pays the winners. Sportsbooks are often independent companies, but some operate as part of (or at least rent space in) sports venues for on-site access.
It used to be that sportsbooks were only legal in Nevada, but a 2018 Supreme Court decision struck down a 1992 law barring state-authorized gambling, and now numerous other states officially allow it.
Individual companies may vary slightly, but most determine the odds for an event (more on that below) and accept bets on both sides. By setting the odds carefully, they can profit regardless of who wins and ensure they have enough money to pay all winners.
What Sports Have Sportsbooks?
Practically every sport has a sportsbook willing to take bets on it. That said, more popular sports tend to have more sportsbooks. Golf, baseball, boxing, football, tennis, racing, and so on have widely-accessible sportsbooks.
Understanding the Odds
One of the most important parts of sports betting is the odds. These tell you the ratio of how much you have to spend to win a certain amount.
Most sportsbooks in America use a system called American odds. These are numbers with a + or – sign in front of them. Positive numbers indicate how much you can win if you bet $100, while negative numbers show how much you’d have to bet to win $100.
For example, if you’re at an event and one team is +500, you’d win $500 if you bet on them and they win. If the other team is -200, you’d have to bet $200 to win $100 if they win.
Negative signs indicate the team (or possibly teams, in some sports) favored to win. You’re more likely to keep your money if you bet on them, so you have to risk a lot more to win a significant amount. Similarly, you’re more likely to lose if you bet on the underdog, so both the risk and the reward are significantly higher.
How Do Sportsbooks Determine Odds?
In most cases, sportsbooks set odds to try and keep the bets on each side as close to even as possible. If one side is an overwhelming favorite to win, then the sportsbook could be out a lot of money if nobody bets on the other side.
To counter this, they offer much better payoffs for teams with a lower chance of winning. The idea is that some people are willing to take on the greater risk for a chance to win big. Sportsbooks also adjust the odds based on how people are betting, although any bet made at specific odds will keep those odds. Otherwise, it would be unfair to people betting.
Smaller sportsbooks may rely on sources like Don Best to provide initial starting odds, then adjust later. Larger sportsbooks may set odds internally.
How Accurate Are Sports Betting Odds?
Sports betting odds are relatively accurate but hardly a reliable predictor of results in sports. Over time, favored teams and players tend to win more often, but any individual event can diverge wildly from the average.
Remember, a sportsbook’s goal is to get the betting as close to even as possible. If a bunch of people bets on a team because they like that team (or hate the other team), that team could become the favorite, even if it’s unlikely to win.
In other words, just like the public, a sportsbook’s odds tend to be more accurate for situations with near-certain winners and losers and much less accurate for close contests.
Sometimes known as the vigorish or the juice, the vig is the house edge for a sportsbook. This is how they make their money and is a slight advantage for themselves in each book. Companies are constantly changing this to remain competitive with other sportsbooks while still making a profit for themselves.
However, you can calculate the vig for any bet with standard odds by using the following formula. Don’t include positive or negative signs from the bet, just the numbers.
The Vig: (Odds of favorite / (Odds of favorite + 100) x 100) + (100 / (Odds of underdog + 100) x 100) – 100 = X%.
Sportsbooks will almost always have a different vig for each event, so finding the one with the lowest vig for your bet is a good way to try and beat the odds a little. Sportsbooks occasionally have odds with no vig, too, as part of special events or promotions.
Types of Sports Bets
There are many types of sports bets available to the public. Here are some more common types you may see:
A straight bet is when you only pick who will win. This is easily the most common type of sports bet and is usually limited to a single game, event, or competition.
For example, if you’re watching football and think the Seattle Seahawks will beat the Dallas Cowboys, you could put a straight bet on the Seahawks.
Straight bets don’t require any special knowledge or experience to make, so this is an excellent place to start if you want to get involved in sports betting but don’t want to risk anything on complicated bets.
Spread bets are significantly more complicated than straight bets. These focus on the margin of victory for teams and by how much a team is likely to win. Like regular odds, the markers for spread bets use + and – signs, with the minus indicating the team who is more likely to win.
To stay with our previous example, let’s say that a sportsbook places the odds of the Seahawks and Cowboys game at -7.5 in favor of the Seahawks. In a spread bet, you’re either going to bet that the Seahawks will win by at least 8 points or that either they’ll win by less than 8 points, or the Cowboys will win.
If you bet on the favorite and they only win by 3 points, then you’d lose even though you bet on the right team. Spread bets are tricky, so it’s not rare to see odds of -110 on both sides, meaning you have to risk $110 to make $100.
A parlay bet combines multiple straight bets into a single wager. These have the advantage of a significantly higher payout if you win, but it’s also much harder to succeed because you have to pick every stage correctly.
Parlays can include multiple bets on a single game or bets on multiple games. For example, if a baseball team is playing seven games against another team, you could bet on the results of each game.
Some sportsbooks will combine spread and parlay bets into something known as a teaser. This is more popular for the NFL than other sports and involves setting the victory margins for each event. However, people betting can shift the odds for their point spread, so payouts tend to be significantly lower.
Total bets, which are sometimes written in the plural, are similar to spread bets. However, rather than focusing on the margin of victory, these bets estimate the final score of the game. Your role is to guess if the result will be over or under a particular number.
Note that in most sports, this is a combined total between both teams. For example, according to baseball statistics, most teams average between 3.3 and 5.3 runs per game, although it’s possible for a single team to go into double digits in a single game.
In this case, a sportsbook might look at the New York Yankees (about 5 runs) and the San Francisco Giants (about 4.3 runs) and put up the total of a game as 10 runs, or slightly higher than the combined average of the two teams. In a total bet, you have to pick if the teams go over or under that amount.
While all sports betting is technically a bet on future results, future bets refer specifically to things happening further in the future than most other bets.
For example, the NFL is famously aggressive in seeking parity between its teams so that each season is highly competitive. It’s much harder to pick a single team to win the Super Bowl at the start of the season than to make a guess right before the Super Bowl, with a whole season’s worth of data to pick a favorite.
Future bets have constantly changing odds but tend to have much better payouts because they’re harder to win. Like other bets, however, the odds for your bet are fixed when you place it. If you bet on a team that’s +2000 and they do well enough that the odds fall to +250 later, you can get a much higher payout than anyone who bets at the newer odds.
So, when it’s not just about picking a winner, how does sports betting work?
Prop bets are essentially the miscellaneous category in sports betting. Instead of picking a winner or a score, the idea is to bet on something else related to the game. These can cover a huge variety of things, so we can’t describe every possible prop bet. However, there are a few categories that show up regularly.
Player props relate to a single player’s performance during the game. These can be almost any statistic people measure regarding players, from points scored to distance traveled. This type of bet doesn’t require picking a winner, and as there’s less variation in a single athlete’s performance, it can be easier to make a good guess.
Game props focus on a detail about the game aside from victory. For example, this could be guessing which player will score first or which team will travel further throughout the game. Like player props, it’s possible to make a game prop on almost anything you can measure.
Novelty props are mainly for significant events like the Super Bowl. These can apply to a huge number of non-game things, like how long it will take someone to sing the National Anthem or which song a singer will do first.
How Profitable Are Winners?
Sports betting is more about ratios than specific amounts, so it’s hard to define exact profitability.
However, statistically, people need to win at least 52.4% of their bets to remain profitable. Among professionals, a win rate of 55% is a good year, and getting up to 65% is probably going to be one of the best years of their career.
Few professionals maintain an average of much higher than 53% year over year, though. Betting is ultimately risky, and over the long term, the odds always catch up. This is especially true in sports, where a particular game can diverge wildly from expectations at almost any moment.
Serious bettors often focus on a single area to specialize in, using data and, more recently, AI-powered analysis to predict the results of games. It’s telling how random sports are that even the best professionals can’t beat the odds for too long.
So, how does sports betting work? When you look at the details, most sportsbooks set odds so that most of the money goes back to the winners, minus a small percentage they keep for themselves. By trying to keep win rates high for players (a little below the 52.4% for breaking even), players will feel like they have a good chance to win any straight bet.
Companies that get too greedy aren’t going to last, so the amount of competition ensures that most players don’t lose too much over the long term.