King Yao is the author of Weighing the Odds in Hold‘em Poker, and Weighing the Odds in Sports Betting. He uses his experience in financial derivative markets and translates it into gambling. Since he left his trading position in 2000, he has been playing poker and betting on sports. He travels to Las Vegas frequently, especially during football season.
Let’s discuss basic principles of sports betting. All sports bettors should know the information below. All other types of casino advantage players, including blackjack players of all skill sets, which includes card counters, should have good working knowledge of Expected Value as well. You should not be betting online or anywhere else without this fundamental knowledge.
Line adjustments made from one game to another are often subtle and difficult to detect since many variables change from game to game. Here is an example of a line change where the variables stayed the same, so the main reason for the line change was an adjustment to the marketplace. The sportsbook opened an overnight baseball line at home team -160. A couple of sharp bettors each bet large on the road team, so the sportsbook adjusted the line to -140; 20 cents is a big move in baseball. Then the game was canceled due to rain, and rescheduled for the following day. Sports bets are good only for the day stated on the ticket; so all bets made on the canceled game were void, even though the same teams and pitchers were rescheduled for the following day. The rescheduled game opened at home team -140. The -160 may have been a mistake, but the line maker learned from the market reaction and did not make the same mistake the following day.
There are sub-markets in sports betting. Each sport can be categorized in a sub-market. The different types of bets that are offered in each sport can be categorized further into minor submarkets. Some of these markets have a lot of interest from bettors, while others do not. The market in NFL games is the deepest and most active market in American sports betting, with NFL point spreads leading the way. Within the NFL betting market there are niche markets such as prop lines, lines on individual quarters, and Grand Salami lines (lines on the combined score of all road teams versus the combined score of all home teams).
Typically the betting limits and the volatility of line movements are related to the size of the market. For example, limits on indoor football may be $500 at a major sportsbook, and the lines move on a $500 wager. But the limits at the same sportsbook on an NFL game might be $100,000, and a four-figure wager may not budge the line.
Having an edge in a big market like NFL point spreads has more value than having an equivalent edge in a small market like indoor football point spreads. You can bet a lot more in one market than the other. Small bettors in small markets need to keep this in mind as well because their growth potential is limited.
This is part of an occasional series of articles.