Have you ever wondered how the odds are determined on sporting events, like football, basketball, baseball or even rugby? Most people make the mistake of assuming the Las Vegas lines are based on how many points the handicappers expect a team to win by. This is actually fairly far from the truth. Las Vegas sports betting odds are set based on how the casino can make money. That’s all that matters to them. If the sportsbook doesn’t make money, it will hurt their bottom line.
The odds are set to entice action on both sides of the coin. They want half of the money to come in on the favorite and half to come in on the underdog. When this happens, the sportsbook wins 100% of the time. They cannot lose. The reason for that is there is juice factored into the equation. When betting on a game against the spread, you aren’t getting even money on your bet. You are wagering $11 to win $10. So let’s do some simple math so you can understand how the house wins if the betting comes in 50/50 on each side…
- Player 1 wagers $11 on Indianapolis at –5.5 versus Jacksonville.
- Player 2 wagers $11 Jacksonville at +5.5
- Both players are risking $11 to win $10
-The house has received $22 in bets but will only have to pay back $21 ($11 back to the player that wins + his $10 profit).
The Initial Odds are Predetermined
In a sense, the initial lines are just a stab in the dark by a handicapper. Okay, maybe calling them a “stab in the dark” is a stretch because the handicappers that set the lines are very smart and know what they’re doing. Basically, they set the lines based on what they think will entice action on both sides. They’re never exactly right. The odds fluctuate throughout the week(s) leading up to the game as more and more bets come in, which leads me to my next point…
The Odds Fluctuate Based on How the Betting Goes
Since the house wants money to come in evenly on both sides, the sportsbooks will move the line based on how the betting comes in. For example, if too much money is coming in on the favorite, they will increase the point spread. This is done as a way to entice more action on the underdog. Sometimes the initial line is just too enticing for the bettors and everyone jumps on the early action on one side. The sportsbooks are then forced to change the line so that bettors will wager on the other side.
Let’s take a look at an example…
- The initial line is Green Bay –3.5 versus Houston.
- On Monday, $25,000 has been wagered on Green Bay and just $8,000 on Houston.
- On Tuesday, the spread has shifted to –4.5. $10,000 was wagered on this day on Houston and $5,000 on Green Bay.
- On Wednesday, the line remained at –4.5. $20,000 was wagered on Houston and $10,000 on Green Bay.
- On Thursday, the line shifted to –4. $9,000 came in on Green Bay and $2,000 on Houston.
- On Friday, the line shifted back to –4.5. $16,000 came in on Houston, $13,000 came in on Green Bay.
- On Saturday, the line remained at –4.5. $22,000 came in on Green Bay and $20,000 came in on Houston.
- On Sunday (gameday), the line remained at –4.5. $10,000 came in on each side.
As you can see, the initial line (-3.5) encouraged heavy action on Green Bay. This is bad for the casino so they had to fluctuate the line throughout the week. The line that ended up being most favorable to the casino was Green Bay at –4.5 because even action was placed. And, this, my friends, is how the Las Vegas sportsbooks set their lines on sporting events.