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How Point Spreads Are Determined

Point Spreads Explained

Point Spreads

How Point Spreads Are Determined

Although millions of people bet on point spreads for sports like American football, basketball, and rugby, most people don’t really understand how point spreads are determined. Most punters think a point spread is supposed to express the true advantage one team has over their opponent, but this is incorrect. The point spread is designed to create equal betting on both sides of a match, which often translates into a spread that adds value to one side. With equal betting on each side of a match, online betting sites can pay the winners with the losers money, and collect the vig for a guaranteed profit. When a book receives heavy betting on one side of a wager, they expose themselves to a potentially big loss. To remove this potential loss, bookmakers move the line to encourage betting on the other side. So, point spreads represent how the public is betting on a match, not an oddsmakers view of the strength of each team.

To explain this more clearly, you could take 3 professional oddsmakers, have them study a matchup and create a true spread. Lets assume the consensus was that team A should be favoured by 4 points over team B. However, if team A has a huge fan base and receives a lot of hype, they might set the point spread at -5 or -5.5 points for team A. The reason is because at -4, team A would receive more than 50% of the betting action (because the large fan base and hype would draw more betting for that team). For sharp punters, team B is showing value because they’re receiving +1 to +1.5 points more than they should. Although this can go in either direction, it’s usually underdogs that receive this added value. It’s also the reason why so many sharps wait until the game is soon to start before they place their bets. As the game gets closer to its start time, casual punters are betting heavy on favourites. To even out the betting, the bookmaker moves the line in further advantage of the underdog. Then, when sharps think the point spread is offering its biggest advantage, they place their bets on the underdog.

How Oddsmakers Create the Point Spread

For the most part, oddsmakers use a similar system to creating the point spread as many professional punters do. They start with a rating for each team, then make adjustments to these ratings based on statistics, location of the game (home & away teams), and anything else they think might impact the game. At online bookmakers, some of them begin with looking at Vegas opening odds, then adjust the point spread based on their customer base. For example, a particular NFL team might receive heavier betting from US bettors than they would from UK bettors. In order to keep their betting action properly split between the two teams, a UK online sports betting sites would need to adjust the Vegas odds. Others might use independent oddsmakers and/or have their own in-house oddsmakers. For the most part, the oddsmakers at online sportsbooks are there to adjust the point spread, not to create opening odds. These people are important to a bookmaker because their decisions determine whether they make a profit or a loss.

The Point Spread is About Money

The amount of money being wagered on each side is really what matters. For example, even if there are fewer bets being placed on one side, if the average sized bet on that side is larger than the other side, this could change the point spread as well. Even a few large bets on one side could change the point spread. This is very common because the public often bets heavier on favourites, while sharps are betting on underdogs. Although there are fewer sharps than casual bettors, sharps place larger wagers.

Here is one common scenario. A bookmaker thinks team A is going to get a larger share of the handle (total money wagered), so they shade the line a point or point and a half against them. Since casual punters tend to bet on favourites regardless of the point spread, team A is still likely to get a larger percentage of the action. Knowing the sharps are waiting for the best spread on the dog, this won’t necessarily change the spread. In some cases, a book might know they’re going to take some large bets on the dog as game time approaches, so in some cases they want to continue getting that action on team A. Then, the sharps come in later and get their bets in on team B, and the book hopes to have close to equal action on both sides. If they do, they have a guaranteed profit without risk.

Another thing to know is that bookmakers would rather be at risk of losing to casual punters instead of the sharps. This is because sharps tend to win more, and casual punters tend to lose more. While they might have to pay out more to casual punters today, they figure to get it back on matches in the future. In truth, bookmakers are looking to beat the sharps, not the public.

How Bookmakers A & B Affect Bookmaker C

Another way a point spread might change is when other books are changing theirs. For example, let’s say you own bookmaker C. You, bookmaker A, and bookmaker B have point spreads that are very close for a particular game. Then, bookmakers A and B change their spreads, creating a situation where you have a much more attractive spread for one team, and much less attractive spread for their opponent. When this happens, you’ll get a lot more action on the team showing value, and less on their competition. If you don’t change your point spread to something closer to books A and B you’ll take too much action on one team, exposing yourself to too much risk. So, now you have to change your point spread as well.

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