Sports Betting Basics

Sports betting involves “taking on the house.”

That is to say, the opposite side of each bet is the sports book itself, not the “pot” created by the poker players or the “pool” created by pari-mutuel betting on horses. This is not a subtle distinction.

The “house” is very experienced at its work in the sports book and a successful wagerer needs to be at least as informed and analytical as the book itself in order to win. Nevertheless, somewhat like pari-mutuel betting, the “public” can influence where the house puts its “line” on a given proposition, opening edges for sharp-eyed gamblers. The real metaphor is to an “underlaid” horse. This refers to the fact that a horse may be so favored by the public betting that its payoff odds are stingier than they should be, considering the horse’s probability of winning. In other words, the horse has less of a chance of winning than the betting odds reflect. In such circumstances, another horse may be an “overlay,” meaning that the reward on the bet is greater than the probability of success. This would potentially be a “good” bet. Likewise, if the “public” has shown a lot of support for a popular local team, the book may alter the pay off odds adversely to the favorite, thereby creating value in a bet on the other side of the proposition. In other words, the “underdog” may pay more generously than the real probability of success would dictate, and this is because the line moved adversely to the local favorite.

Unlike many other gaming opportunities in which the house advantage is impossible to overcome, sports betting offers the possibility of positive earnings on a net basis over time. To clarify, there are no “professional” roulette players, as the house advantage is built-in to the payoff odds. So anyone trying to make a living at roulette without cheating is bound to fail in the long run, unless,
of course, he or she works for the house. Contrary to that approach, many people do make good money betting on sports. Those who chronically win in the sports book are often called “sharps.” Those who chronically lose are called “fans” or “the public” or “squares” or even “suckers” in the worst of cases.

The principal distinguishing characteristic for these two groups was nicknamed “Type I” or “Type II” players. Type I players bet without knowing (or caring) if they have an advantage in the wager. Type II players do not bet unless the proposition meets their minimum requirements for expected profits.

The secret to coming out ahead in sports betting is not really that hidden or mysterious. Much of the analysis involved in successful sports betting involves second guessing the creator of the house “lines.” In larger books, the line-maker may be a person or even a “team” of handicappers that work directly for the casino. In smaller books, and in those books that are part of a family or group of casinos (like Coast, Station or MGM), the lines makers may be relatively far away, creating propositions and odds for several casinos at once. Whether the “lines” come locally from the manager of the book or from some centralized source, there is always some discretion and flexibility at the local level to modify the betting propositions.