How US Sports Betting Works (Part 1)

We’ve all made a sports bet at one time in our lives, from the informal bet with a friend that a favourite baseball team will tops its division, to actually going to a website (and there are many!) to get a “football square” for the Super Bowl.

You usually make sports bets through a bookmaker. Now, be careful with how you say it: a bookmaker is recognized and given authority by a country to collect bets (namely because that country has legalized sports betting). Bookies are generally illicit bookmakers. Today, you can also place bets through the Internet. There are thousands of websites that feature sports betting and accept wagers on sporting events around the world.

Here’s how a bet work. Let’s say you place $110 bet on a fair coin, with a pay out of $210 to win and $0 to lose. On this line, it costs $220 to bet both sides of the same coin simultaneously, but the combined bet always pays $210.

You can make two kinds of wagers: a straight-up or money line bet, or a point spread wager. Moneylines and straight-up prices help set odds on sports such as soccer, baseball and hockey. These games’ scoring systems make it impossible to base it on point spreads. You can also bet on one-on-one matches like boxing. These are usually straight-up odds.

For these sports, bookmakers in Europe and Asia generally use straight-up odds, which are usually evaluated on payout for a single bet unit. To illustrate: a 2-1 favourite would be set at 1.50, while an underdog returning twice the amount wagered would be set at price of 3.00.

American bookmakers generally use moneylines, which are quoted in terms of the amount required to win $100 on a favourite, or the amount paid for a $100 bet on an underdog. What you win is the net amount which is given to you aside from your initial bet. If a person wins $200 on a bet of $100, he actually has a take home $300 (i.e. $200 plus the initial bet of $100).

The difference between point spread bets and moneyline wagers is that the latter only requires that the team you bet on win the match. In sports like baseball, where some teams are heavy favourites (with odds as much as -350 or higher), the moneyline system levels the playing field by requiring that a hefty sum be risked on the favourite, while enticing underdog players with a higher payout.

For point spreads, you usually need to risk $110 to win $100, the extra $10 being the bookmaker’s vigorish if the wager loses. However, to level the odds, you can only win on your favourite if they take the game by a particular victory margin, which is set at the time of the wager. Also, betting on the underdog is also less risky since you can collect even when your team loses, just as long as you lose by a few points less than were quoted by the bookmaker at the time you placed your bet.