How Sports Betting Odds Work
Sportsbook odds are the foundation of sports betting. If you don’t understand odds, then you won’t understand sports betting. In this article, we discuss how sports betting odds work.
Sportsbook Odds = Prices
If you think about the stock market, at any given moment, there is a specific price where you can buy a given quantity of shares. For example, maybe you are able to buy 100 shares of AAPL at a price of $148.19 each. In sports betting, it is no different. If the Houston Rockets are -120 moneyline odds on Fanduel, then Fanduel will allow you to “buy” the Rockets @ -120 odds for some amount of money.
Fanduel will not let you put $1,000,000 on the Rockets @ -120 odds. Sportsbooks do not allow bets that big, as the market is simply not “liquid” or active enough on these bookmakers to allow bets that big. If you are “limited,” then Fanduel may allow you to only bet up to, say, $500 on the Rockets -120 odds.
On the other hand, if Fanduel thinks you are a losing bettor (e.g. unprofitable), they may allow you to put up to $9,000 on Rockets -120. Sportsbooks allow losing bettors to wager larger sums of money on odds. This makes sense; the books don’t want action from profitable bettors. Sportsbooks only want to take action from non-mathematical, losing bettors.
So what does -120 odds mean? If an “odd” begins with a minus sign (“-“), this means you need to wager that much money to win $100. In this example, you would need to bet $120 on the Rockets to win $100 profit. If the Rockets win, you would profit $100. If the Rockets lose, you would lose $120.
On the other hand, if an odd begins with a plus sign (“+”), the odds represents your total profit if the wager wins. In other words, if you bet on the Miami Marlins +220 moneyline odds versus the Los Angeles Dodgers, you would profit $220 for every $100 bet if the Marlins win. Odds = prices, and outcomes in sports betting are always binary. You either win or lose.
When you place a bet, you should always reference the odds that you got on a given bookmaker. Betting the Marlins +220 odds may be a fantastic bet, but betting the Marlins +180 odds may be an awful bet. This is the key to understanding data-driven, profitable sports betting for the long haul. You should not be focused on betting particular teams; sports betting is not about picking “winners.” Mathematical, profit-driven sports betting is all about identifying mispriced odds on bookmakers and taking advantage of them.
Line Shopping = Getting the Best Odds
In sports betting, odds vary from bookmaker to bookmaker. Getting the best possible odds, or price, on a given wager is referred to as line shopping.
As you can see below, the best odds on the Chiefs are -325 odds on Pointsbet (e.g. bet $325 to win $100 profit). The best odds on the Raiders are on DraftKings (+280 odds, bet $100 to profit $280). If you look closely, you can see that Pointsbet sportsbook is offering +260 odds on the Raiders. Why on earth would you ever place a bet on the Raiders on Pointsbet @ +260 odds (bet $100 to profit $260) if you could place a bet on DraftKings at +280 odds? It makes no sense.
This is why ruthless line shopping is so important in sports betting. You need to make sure you are getting the best possible “price” for your wager. DraftKings is just a tab click away from Pointsbet, so it would literally never make sense to place a bet on the Raiders at +260 odds on Pointsbet. You are simply losing money in the long-run, as your profit would be $20 less for every $100 bet on DraftKings vs. Pointsbet.
Don’t get ripped off by the sportsbooks offering subpar odds! Sports betting is all about earning 1%-4% profit margins on a daily basis and watching your returns compound & compound & compound. You will never be a mathematically profitable sports bettor if you are not line shopping ruthlessly to get the best possible odds.
Sports Betting Odds are Moving
If you think about it, this difference in bookmaker odds is pretty fascinating. It’s unlike any other market. If you go to Robinhood vs. Fidelity, it’s not like you see a different price on AAPL stock at a given moment in time. This only happens in sports betting. This difference in odds between bookmakers is why sports betting is so fascinating; the entire market is extremely inefficient.
Sports is a financial market, just like the stock market. Odds are not static, and they are determined by supply & demand. Just like the price of Gamestop stock may be $100 one minute and $150 the next one, sports odds can move in a hurry.
If Kevin Durant gets injured, the Brooklyn Nets may jump from -200 odds to -120 odds in a matter of minutes. The Nets are less likely to win, and that is reflected in the odds of the game. Maybe Kyrie Irving is expected to have the ball more, too, given that Durant is out. Thus, Kyrie over 30 points may jump from -120 odds to -180 odds. As new information enters the sports betting ecosystem and bettors place wagers, odds begin to move.
When people buy a stock, or one of many cryptocurrencies, the price goes up. When they sell, the price goes down. Supply and demand. If a lot of bettors start to wager on something, the odds get less favorable. Again, sports betting is a market like all others, and odds are constantly changing. For that reason, you constantly need to be browsing odds at various bookmakers (e.g. line shopping) to make sure that you are getting the best possible odds. Otherwise, you’ll get ripped off by a sportsbook with terrible odds, and that is the easiest way to become an unprofitable sports bettor. If you’re placing bets at +145 odds when other books are offering +160 odds, there is no way that you will make money in sports betting long-term.