How Sports Betting Works (In Case The Recent Supreme Court Ruling Piqued Your Interest)
The Supreme Court ruled that New Jersey could introduce sports betting, opening the floodgates for other states looking for new avenues to raise revenue.
First thing to remember, you won’t be able to bet across state lines. So until other states get their acts together, unless you’re a resident of New Jersey or one of a handful of other states that are just about ready to go (like Mississippi), you’ll probably have to wait a bit or physically travel to one of the states that do have it. (Or, of course, if you have a friend in New Jersey…😉) While it’s true state governments are always looking for new sources of revenue — which is why marijuana is suddenly becoming legal all over the place — when it comes to sports betting, many may wait to see how New Jersey does before picking the ball up themselves, so to speak.
First, A Disclaimer
Unless you’re a professional gambler, betting will exponentially increase the emotional highs and lows of watching a sporting event. If you’ve never done it, more than you imagine.
It can ruin or make your whole week. Be ready for that.
It can also be a lot of fun. Although it’s generally not a great way to make money. Remember, even if you are right exactly half the time, you won’t break even: you will lose, because you are paying the casino or bookmaker a commission or “vig” on top of the amount you bet.
The Simplest Kind Of Bet
An individual game bet lets you bet on a single team for a specific game. Typically, in addition to the amount you want to bet, you’ll pay the book a 10% “vig” (short for vigorish), which is a fee for taking your bet that you get back if you win. If you lose, the casino keeps your original wager and the “vig”.
Say you want to win $100 on a game. Instead of betting $100, you will typically need to bet $110. That’s because you’ll give the book the $100 you want to bet + a $10 vig = $110. If your team wins you get back that $100 bet + $10 vig + $100 in winnings = $210 altogether. If you lose, you lose $100 plus the $10 vig.
Good so far?
This is where it starts getting complicated. Since some teams are a lot better than others, odds-makers compensate for imbalances by creating what’s called a “point spread”.
For instance, in football a touchdown typically scores 7 points. So if “your team” is better than the team they’re playing, they might be favored by 7 points. If “your team” is worse than the team they’re playing, they might be 7 point underdogs. This will be taken into account when you bet, and is called giving or getting points.
If your team is favored by a touchdown, the book will display it as -7. Because your team is expected to be better than the team they’re playing, they will need to win by more than a touchdown in order for you to win your bet. Another way of looking at it is you will be giving the team you’re betting against a 7 point advantage at the start of the game, regardless of the fact that the actual score at the start of any game will always be 0–0.
Conversely, the underdog will be displayed as +7. Meaning they are expected to underperform by a touchdown. If you bet on this team instead, you will be getting 7 points. Meaning this team can even lose the game and you’ll still win, as long as they don’t lose by more than a touchdown.
If the game ends with the favored team up by exactly a touchdown, it’s what’s called a push, and you’ll get back your original bet plus the vig no matter which side you bet, but no winnings.
A lot of times you will also see point spreads expressed in 1/2 points. For instance instead of -7, “your team” might be favored by -7 1/2. How is that possible? There are no half points in sports! That’s exactly the point: half points ensure there are no “pushes”. If you take “your team” -7 1/2 they will actually have to win by 8 points or more in order for you to collect. If they win by 7, it’s no longer a push: now, you lose.
Sports books try to hedge their bets as much as possible, in order to take as little risk as possible. If betting is coming in heavy on one team, they will work to encourage bettors to start taking the other team. How do they do this? By tweaking the point spread to make it more attractive to take the other side. So point spreads change a lot, especially as it gets closer to game time. However, once you’ve placed your bet, your point spread is locked in at whatever it was at the time you made your bet. You don’t have to worry about anything that happens with the spread after that.
There is a way do do a straight win-or-lose bet without a point spread, but you’ll pay for the privilege. These are called Moneyline bets. When you take “your team” in a Moneyline bet, all it has to do is win. Doesn’t matter by how much.
So why not just do this all the time? Because if you are taking a team that’s heavily favored, you’ll have to bet a lot of money in order to win very little. The Moneyline is displayed differently than a point spread. For instance, a heavily favored team might appear as -300. Meaning you would have to bet $300 to collect just $100 in winnings.
On the other hand, if you’ve done your research and have good information about an underdog that’s due for a win, you can do very well with Moneyline bets because in lieu of getting points, you’ll be getting better odds, let’s say +300 for a team that’s not really expected to win. But if it does, you’ll collect $300 for every $100 you bet.
There is no vig on Moneyline bets, because it’s built into the price of the bet.
Parlays are very popular sports bets because of potentially big payouts that can come even from relatively small wagers. In a parlay, you take more than one team — usually anywhere from 2 to 8 — but all the teams you pick have to win in order for you to win the bet.
As an example, a 3-team parlay might pay 6–1. (Payout rates on parlays can vary slightly from book to book so do your homework). So now all of a sudden your $100 bet is potentially worth $600! Cool, right?
Not so fast. Because in order to win a parlay you have to win all the games in that parlay, not just some of them. In a 3 team parlay, even if you get 2 of the teams right, you still lose 100% of your bet. If you’d done straight bets instead, and won 2 out of 3, you’d be ahead. Parlays can be point spread bets, Moneyline bets, or a combination of both.
Parlays are built with convenience in mind, and they should be viewed that way. Even though there is no vig on a parlay bet, because it’s built in, the casino takes a larger bite than it does with individual bets. You will always get a better payout winning 3 consecutive individual game bets and letting your winnings “ride” each time, than winning one 3-team parlay. However, if you want to bet on games that are going on simultaneously, sometimes parlays are the way to go. Like we said, convenience…
There Are A Lot Of Other Kinds Of Bets: Prop Bets, Over/Unders, First-Half And Halftime Bets, Teasers, Reverse teasers, In-Game Betting, “Puck Line” (for hockey) etc.
Some of these types of bets are really fun. Experiment with them after you get more comfortable with basic betting protocols and strategies.
(Plus a lot of these may not be offered in New Jersey, at least not right away).
Some Interesting Miscellany:
The legal sports betting industry, which has mostly been centered around Las Vegas, was revolutionized a few years ago when Wall Street got into the picture. The bond trading firm Cantor Fitzgerald (best known for its controversial CEO Howard Lutnick), launched a subsidiary now known as CG Technology, and quickly won concessions to run a lot of sports books. (There were rampant rumors about a year ago that unit was up to be sold, but we couldn’t find any information that it ever actually was.) It led the way for innovations like in-game wagering, where odds are constantly recalculated (before that as soon as a game started, you were locked out until at least one period was over.) They also made internet and phone betting ubiquitous (there was a time not too long ago in Las Vegas where you weren’t even allowed to use a cell phone in the sports book).
Casino sports books are often concessions: that is, not actually operated by the casino they’re in because they require specialized skills to run, namely odds-making. And so there are benefits to being able to spread those operations over many books. Also sports books are not huge moneymakers for casinos compared to slots and table games. As we’ve said, they hedge a lot of their risk and so all they’re guaranteed to earn is the vig, which they keep only if the bettor loses, meaning about 5% of what they take in.
Hopefully this’ll help you get the hang of it! Have fun! Don’t bet too much!