Out of the tens of millions of people who bet on sports regularly throughout the year, the unfortunate reality is that a very small percentage of this group will win money. The facts are undeniable. A very elite group of bettors will win money, most will lose a little, and some will find themselves experiencing serious financial strain.
All of this begs the question… “Why is it that the sportsbooks always win?”
In this article, I’ll take a closer look at that question and hopefully provide some helpful answers that explain why the sportsbooks never have a bad year.
1.The Odds Are Always Stacked in the House’s Favor
This isn’t going to be breaking news to anyone, but the number one reason that the house is able to come away ahead no matter what comes down to the odds.
In nearly all circumstances, if you’re betting on the point spread (which is the most popular way to bet on sports), you’ll notice that the odds are -110 regardless of which team you bet on. What does this mean? Essentially, the house is going to keep 10% no matter which side wins.
Of course, you might then be thinking,
“If there’s a significant disparity in money placed on either side, then the sportsbook has a chance to lose, right?”
In theory, the answer to this is yes, and there are times when the sportsbooks will “take a bath” (the phrase used to describe when the sportsbooks lose big) on an event. However, these instances are fairly rare because the majority of the money usually isn’t stacked on one side.
If you think that the 10% “juice” or “vig” that you’ll find on the spread is significant, the sportsbooks can be even greedier than that on a regular basis. For example, many prop bets you’ll find at various books will have odds of -120 on both sides. That means the house stands to take 20% extra from the losing side while eliminating the risk. It’s a sure thing one side will lose, so it’s a sure thing one side will have to pay the vig.
Finally, consider the moneyline. Unlike the spread which will apply equally to both sides, things can get much more complicated when you’re betting on a team to win the game outright.
If the Packers are playing the Vikings, you might see moneyline odds like “GB -225 and MIN +175.” That means it would take $225 to win $100 if you bet on Green Bay, but you would only win $175 if you bet $100 on Minnesota.
Much like a regular consumer product, the market determines the odds (I’ll get to this in the next section). If a sportsbook isn’t receiving action on a certain line they’ll change it, but they’re never going to put themselves in a position to come out of it at a loss.
- Betting Markets Contribute to the Odds
One of the most interesting components of sports betting to look at is the idea of betting markets.
If you’re unfamiliar with how it works, I’ll explain it briefly.
When oddsmakers put out their initial numbers, typically referred to as the “opening lines/odds,” action starts coming in. As the money comes in on either side of the bet, the lines will change in an effort to get half of the money on each side.
If the Steelers are playing against the Patriots and the opening odds have New England as a 6-point favorite, you can expect that to change if a high percentage of the money comes in on one side or the other.
Continuing with the example, I’ll assume 65% of the money is coming in on the Steelers at +6. In an effort to even things out, that initial +6 number might shrink to +5 to encourage the public to bet on the Patriots.
At the end of the day, the sportsbooks’ goal is to get the action to a point where each side is around 50%. Now, it usually won’t be perfectly even, but if it’s within a 10% margin, that means they’re guaranteed to make money regardless of the outcome.
As I mentioned earlier, sportsbooks do occasionally lose big. This happens when bettors don’t react to the changing odds. For example, in the scenario above with the Steelers and Patriots, bettors might decide that they’re on the Steelers whether they’re getting 6 points, 5 points, or 3 points.
You might be asking, “Why wouldn’t the sportsbook shift the odds so significantly that bettors would have no choice but to take the Patriots?” The answer is simple: This puts too much risk on the house.
The bottom line here is that yes, sportsbooks can lose big, but it happens too infrequently that it’s not going to impact them in a significant way on a consistent basis.
- They Offer Trap Bet Offerings
You know those stories that pop up every so often that feature a bettor who turned a $20 play into $10,000? That’s as good as advertising can get for the sportsbooks.
Much in the same way that slot machines flash and beep to alert everyone in the casino that it is in fact possible to hit the jackpot, sportsbooks love to show bettors that there’s a chance they could hit it big.
Every sports gambler knows someone who has made it their mission to hit a big parlay. These bets provide the opportunity to hit the lottery with just a small risk to the bettor. Unfortunately, this is by design.
Parlays might seem like something the sportsbooks are afraid of, but they’re actually the biggest moneymakers for the house (remember that next time you go to play one yourself). Because it’s complicated to do the math and calculate what the actual odds should be on a parlay, the sportsbooks take major liberties in setting bettors up for failure.
In many instances, parlays don’t actually give the bettor an “advantage” until the bet includes five or six “legs.” That means if you really want true odds, you’re going to have to win a number of games (without a loss) that just isn’t realistic, not to mention totally unsustainable as a betting strategy.
Just remember that 99.9% of the time, the sportsbooks don’t make mistakes.
If a bet seems too good to be true, as many parlays do when you enter the “risk to win” numbers, it probably is. You won’t make tens of thousands of dollars on a $50 bet any other way, but your chances of winning this amount are probably just as good if you buy a scratch-off ticket at the local gas station.
- Simply, the Public Is Uninformed
One of the things all consistent sports bettors are able to recognize are the “trick” lines. Yes, I’m just making that term up, but you’ll know what I’m referring to here.
This type of line is the one where you look at it and say, “That can’t be right. It seems too easy.” If there’s a theme here, it’s that if it seems too easy to win, you can bet (no pun intended) that something is up.
One example of this phenomenon is seen in college sports when an unranked team is favored (sometimes heavily) over a ranked team. Statistically, the unranked team covers at a higher rate than in any other circumstance. The biggest winner, however, is the sportsbook.
It sounds simplistic, but the reality is that oddsmakers have much more information—not to mention systems to make sense of that information—that the general public just doesn’t have. It’s literally their job to gather as much data as possible and create odds based on that data.
The average sports fan, and average sports bettor, has a sense of overconfidence in their knowledge of the games.
The beneficiary of this is the sportsbook, and this is proven time and time again. Perhaps this is why the sharps, who dedicate a huge amount of time to researching matchups, are the only ones who consistently make money.
If this article feels discouraging, remember that betting isn’t just for making money. It makes every game—even those Wednesday night MAC football games— veryentertaining. As long as you aren’t betting an amount of money you can’t cover, just consider it the price of admission.