Why Odds and Lines Change
Have you ever wondered how the odds and lines work at the sportsbook? Ever been curious why the numbers are what they are and why they seem to "magically" change? In this guide, we're going to answer both of these questions and more. We're going to tell you why the odds and lines at the sportsbook move, and most importantly what this means for you. We'll also give you some tips that can help you turn your newfound understanding into profit.
The Goal of a Sportsbook
Before you can understand why lines move, you need to understand what is going on behind the scenes. Sportsbooks are not charities. They are companies designed to make a lot of money by offering betting action on sports competitions. You probably already knew this. Here's something you might not know: even though the sportsbooks are offering bets to you, they don't like to gamble at all. Their goal is to try to guarantee that they are going to make money on every single bet they offer.
How do they do this? What the sportsbook tries to do is get the exact same amount of money on both sides of a contest. If they get $10 total bet on Team A and $10 total bet on Team B, then no matter who wins, they can use the losing money to pay the winners. If Team A wins, they take the $10 from the Team B losers and pay the Team A winners. If Team B wins, they do the same thing, but in reverse.
So, how does the sportsbook make money? If you've ever made a bet before, you may or may not have noticed that the sportsbook is taking a little bit off the top of each bet. This is known as the house rake (the "juice"). Instead of paying back the full $10 to the winners, they take a very small percentage off of the top as their profit for facilitating the bets.
Let's look at a real bet to make sure you understand this before we move on. Here is a real spread bet on an NFL football game:
- Denver Broncos -6 (-110)
- Dallas Cowboys +6 (-110)
If you bet $10 on the Denver Broncos and win your bet, you will get $9.09 in profit back. That $0.91 that you aren't getting back is the sportsbook juice. So, if the sportsbook gets $10 in bets on the Broncos and $10 in bets on the Cowboys, here is what their accounting will look like:
- Take in $10 on the Broncos (Casino has $10).
- Take in $10 on the Cowboys (Casino has $20).
Broncos win and bettors are owed their original bet back ($10), and their profit ($9.09).
Casino gives back $19.09 to the Broncos bettors (Casino has $0.91).
As you can see, no matter who wins the game, the sportsbook is going to make a profit. They aren't in the business of gambling. If they could, they would have every single game have the exact same amount of money bet on both sides and take their small profit. So the goal of the sportsbook is to get the same amount of money bet on both sides of every bet.
How do they do this? They achieve their goal by shifting the lines and odds to entice or discourage action on the side of the bet they need. Let's walk you through the steps of this.
- 1Setting the initial line.
- 2Reacting to bets.
1. Setting the Initial Line
The first thing that the sportsbook needs to do is set the initial line. Imagine this. Let's say that Floyd Mayweather and Justin Bieber are going to have a boxing match. If you have an IQ over 10, you know that Floyd Mayweather (one of the most decorated boxers of all time) is going to destroy Justin Bieber. If the sportsbook let you bet on this fight, who would you bet on? Well, you and everyone else in the world would bet on Floyd Mayweather. All of the money would come in on him, and the sportsbook would be out of money paying out bets when Mayweather wins.
Obviously, the sportsbook would be terrible at business if they let this happen. So, what do they do? They set the initial payout odds to try to deter action on Mayweather and encourage action on J-Biebs. They'll set the odds/line to pay out a ton of money if Bieber wins and pay you very little if Mayweather wins.
For example, they might set the starting line at this:
- Bieber (+9500)
- Mayweather (-9000)
This means that if you bet $100 on each of these "fighters," here's how much you would win:
A $100 bet on Bieber would get you $9,500 in profit!
A $100 bet on Mayweather would get you $1.11 in profit.
The sportsbook does their best to set the line as close to accurate based on what they think will happen.
If they are setting a point spread bet, they'll attempt to achieve the same thing by setting the point spread line as close as they can to what they think will actually happen. Let's go back to the NFL and say that the Browns are playing the Patriots. The sportsbook thinks that the Patriots are going to win by 8 points. They would set the line like this:
- Browns +8 (-110)
- Patriots -8 (-110)
These bets will pay out the same amount for a correct pick, but the teams are forced to cover the spread. The Browns have to lose by no more than 8 points to win, and the Patriots need to win by more than 8 points for you to win your bet.
2. Reacting to Bets
If the sportsbook set the line correctly and the bettors agree, they will end up getting the same amount of money bet on both sides of the bet. If everyone agrees that the Patriots are supposed to win by 8, half of the people will probably bet the Browns and half will bet the Patriots. The thing is, though, that it never works out this perfectly. First, the sportsbook is not always going to be correct with their line. Second, it's hard to predict how the public is going to bet. Often, the sportsbook is going to end up with too much money bet on one side of the bet.
To try to balance things out, the book needs to adjust the odds or the line to try to entice action on the side of the bet that they want it on. Let's look at some scenarios with our earlier examples. Let's say that people find out that Bieber has secretly been taking steroids and boxing lessons and they think he has a much better shot than originally thought. To back up their opinion, tons of bets pour in on Bieber, and not a lot of people bet on Mayweather.
In order to fix this, the sportsbook needs to try to get more people to bet on Mayweather and fewer people to bet on Bieber. To do this, they adjust the payouts. They change the odds so that a bet on Bieber pays worse than it originally did and a bet on Mayweather pays better than before. Here are what the odds were originally and the profit you'd earn on a $100 bet:
- Bieber (+9500) = $9,500
- Mayweather (-9000) = $1.11
To try to deter and encourage the action as needed, the sportsbook changes the odds to this:
- Bieber (+5000)
- Mayweather (-4500)
A $100 bet on Bieber now gets you only $8,000 in profit, and a $100 bet on Mayweather will get you double what it did before: $2.22. The idea is that this will get people to start betting more on the other side of the bet to balance things out. If it doesn't, the sportsbook will adjust the odds further until it does. If it changes things too much, they will shift the odds back to try to balance things.
The adjustments and odds changes will continue up until action on the fight ends. The sportsbooks won't be able to get things perfect, but they do their best to get things as close as possible.
They'll do the same thing with spread bets, but instead of changing the payout odds, they'll usually just change the point spread. On rare occasions, they will alter the payout odds slightly if they really don't want to change the spread number, but that's not often.
Sportsbooks like to get the same amount of money on both sides of a bet so they never lose any money. To profit, they take a small percentage off the top of each bet. To get the same amount of money on each side of the bet, the sportsbook will adjust the payout odds or spread line to encourage or discourage action on different sides of the bet.
Sportsbooks Operate Individually
Something important that we need to point out is that sportsbooks operate individually. Yes, some books owned by the same parent company work together, but most of them operate independently. What does this mean? This means that these line movements are going to happen in relation to what is going on at their individual sportsbook.
A sportsbook does not care what is going on at the book down the road. They couldn't care less about who they are taking bets on. All they care about is what is going on in their sportsbook. This means that two sportsbooks could have completely different lines on the exact same bet.
Let's say there is a game between Team A and Team B. Casino 1 and Casino 2 are taking bets on the game. If everyone who is betting at Casino 1 is betting on Team A and everyone at Casino 2 is betting on Team B, you're going to see drastically different lines at both casinos. You'll get much better payout odds on Team B at Casino 1 because they need more bets on that side of the game. At Casino 2, you'll get better payout odds on Team A because they need to get more money on that side of the bet.
When we get to the "Why This Is Important" section below, you'll see why this information should be the cornerstone of your betting strategy.
Causes of Line Movement
You now understand that the line moves because the sportsbook is trying to get the same amount of money on both sides of the bet. You also understand that this is in response to how people are choosing to bet. So let's talk about a few things that happen that can cause the line to move quickly. Being able to predict line movement can really help you place smarter and more profitable bets. We'll cover that in the "Why This Is Important" section below. First, let's talk about the catalysts for line movement.
The Public vs. the Sharps
Within the world of betting, there are two groups of people. First, you have the "betting public," which includes all of the recreational bettors who typically make smaller bets. Second, you have the "sharps," who are the bettors who bet professionally and typically make much larger bets. While the betting public makes smaller bets, there are a lot more recreational bettors, so they still have a lot of influence on the betting lines.
Typically, if a line makes a big move as soon as it comes out or early in the week, that is the sharp bettors taking advantage of a bad line. They usually hammer a lot of money, and the lines will shift pretty quickly. If a line makes a move closer to game time or late in the week, this is usually the betting public making their bets. We say "usually" because nothing is absolute and the sharps do make bets late in the week when things change.
Key Player Injuries
Two of the biggest causes of line movement are injuries or players being sat for a game. A negative injury report can be enough to send the line moving quickly as people bet accordingly. Imagine if Tom Brady suddenly got hurt in practice a few days before a game. If the line prior to that was Patriots -10, what do you think it's going to move to? Most likely it will move to something like Patriots -2 or -3, as they are now much less likely to win, and people are going to start betting aggressively on the team they are playing until the line moves.
Keeping an eye on injuries can help you get a leg up on the other bettors. If you happen to hear about Tom's injury before everyone starts betting on the other side of the game, you can get an amazing point spread or payout price on a bet. Players getting suspended or arrested can have the same effect. Basically, if someone isn't going to be playing or is doubtful to play, it's going to have an effect on the line.
The betting public has a strong tendency to overreact to news stories. Often, a story will come out about one of the teams or players in an upcoming game, and the betting public will immediately take to the books. This can cause the line to move and create some great betting opportunities.
What you need to do when news breaks is ask yourself if it is or is not going to have an effect on the outcome of the game. The media is in the business of entertaining, so they're going to be overplaying and hyping up stories to be bigger than they really are. You need to ask yourself what sort of effect the news is going to have on the game, NOT what effect it has on the narrative.
Why This Is Important to You
So, this begs the major question - why is any of this important to you? This information is important for several reasons. First, we talked about how each sportsbook will adjust their lines individually to accomplish what they need. This means that different sportsbooks are going to have different lines and different payouts on the exact same bets.
Here's a simple question to explain why this is important: you want to bet on the Patriots to win an upcoming game. You take a look at two different sportsbooks, and here are the lines that you see:
- Sportsbook 1
- Sportsbook 2
Patriots -5 (-110)
Patriots -4 (-110)
Where would you make your Patriots bet? You would be insane if you chose to make your bet at Sportsbook 1. Sportsbook 2 is giving an entire additional point for the exact same bet. If the Patriots end up winning by four points, you would lose your bet if you made it at Sportsbook 1, and push (get your money back) if you made your bet at Sportsbook 2.
What we're talking about here is called line shopping. Line shopping is the process of taking a look at multiple sportsbooks before you place a bet to make sure you are getting the best line or the best payout odds possible. If you're not line shopping, you're leaving money on the table. Thanks to the ease of online sports betting, you can line shop in a matter of seconds and make sure that you're getting the best price on every bet you make. If you don't think this is important, you must be brand new to sports betting and have a tough lesson coming your way.
Another reason this is important is that you can start to predict when the best time for you to bet is. If you can predict how the betting public is going to react, you can know whether you should take a bet you're interested in immediately or wait to get a better line or payout.
Let's say that you're looking at an NFL game between the Patriots and the Browns. Let's say that early in the week the spread is Browns +13.5. You have a prediction that the Browns are going to cover. Should you bet right away? Well, let's say that you think the general public thinks the Browns are going to get crushed by the Patriots. Most recreational bettors don't place their bets until the weekend or day of the game, so you decide to wait. On the day of the game, as you expected, bets pour in on the Patriots. The line moves to Browns +14, and then you decide to make your bet. Because you accurately predicted the line movement, you were able to get a "free" half point on the game.
When you wait on a line, you do run the risk of the line moving the other direction. If that happens and you don't like the new line, you aren't out any money. You just don't have to make that bet. If the line doesn't move at all, you can make the original bet you wanted without a care in the world. If the bet moves how you want it to, though, you put yourself in a much more favorable position to win your bet. These little half-point and small payout odds differences can have a dramatic effect on your bottom line.
The Final Word
Hopefully by now you have a much better understanding of why sports betting lines and odds change. Understanding why the line moves and what can cause it to move can give you a big leg up on the competition and can have a big effect on your end-of-the-day bottom line. At the very minimum, we hope that this guide has motivated you to start line shopping if you aren't already. Additionally, though, we hope you start trying to predict line movement and incorporate it into your betting strategy. If you can squeeze out a slightly better payout or an extra half or full point on a bet, you're going to be a much more successful bettor.