It’s a warm Sunday in November. Jesse, a 41-year-old executive at a toy company, is up at the crack of dawn pouring over every piece of data he can get his hands on about every NFL team playing later that day. He’s turned off his phone. His wife and kids know not to bother him. And he’s drinking his coffee from the same Oakland Raiders mug he’s broken out every game day since 1997.
“NFL players always talk about the work they put in watching game film,” says Jesse between sips. “It’s no different. It’s me against them and all I have is what I know.” The “them” is Sports Interaction, Jesse’s preferred book and his opponent in the game of sports gambling for the last two-and-a-half years.
Sports gambling’s a contest between the bettor and the sports book. The action starts with the sports book. They pick up a game and assess the “true odds” of every outcome based on their research (read: a team of stat freaks who look under every number). Then the book adjusts the odds of each outcome to make sure the company is profitable regardless of what happens.
So let’s say there’s a Detroit Lions vs. Green Bay Packers game where the true odds of Green Bay winning are 75% and the odds of a Detroit win are 25%. These odds, expressed as a money line, would be GB –300 (you’d have to bet $300 on GB to win $100) and DET +300 (you’d win $300 on a $100 bet). Now let’s say the sports book takes 10 total bets on the game, five for each team.
- If Green Bay wins, the sports book takes $500 from the Lions’ bettors
…but uses it to pay out the Green Bay bettors, so it’s a wash.
- If Detroit wins, the sports book takes $1,500 from the Packers’ bettors
…but now owes the Lions’ bettors a total of $1,500. Another wash.
At true odds, there’s no money for the sports book.
So they adjust the odds to ensure they’re earning no matter who wins. In the Green Bay vs. Detroit example, the sports book would offer Green Bay at –400 and Detroit at +200.
This means a bettor would have to put up $400 on GB to win $100 and $100 on DET to win $200. At these odds, if Green Bay wins, the sports book transfers the $500 it took from the five Lions’ bettors to the Packers’ bettors for a wash.
But if Detroit wins, the sports book keeps the $2,000 from the five Packers’ bettors, but only owes the five Lions’ bettors $1,500 total (the original $100 bets plus 5 x $200).
So the sports book makes $500. That’s better, but not awesome because there’s still a scenario where they’re not making money. It becomes awesome when the one constant we’ve assumed up until now changes: how many bets are placed on each outcome.
Some bettors play the long game like the sports books, strategically betting to ensure a steady profit. Some bettors are all about picking the underdogs and don’t mind losing. Some will bet on their favourite teams regardless of the odds. Some just like the action. And it goes on.
The sports books know this, so they use their odds to attract the most profitable ratio of bettor styles. Let’s go back to GB vs. DET. In this case, to make a profit on any outcome, the sports book needs slightly more Lions bettors than Packers bettors.
This means they have to attract more people willing to bet the underdog, like Lions fans, glory-chasers, desperate bettors looking for a big payday and smart bettors who see value in taking a flier on this game. At the same time, they have to keep some people from picking Green Bay by making the bet not worth their while.
GB –400 won’t be worth the risk to many bettors, but DET +200 worth a flier on 25% true odds, especially if you have enough safe bets locked in. So based on this strategy, let’s say the sports books takes in 100 bets, 40 for for Green Bay and 60 for Detroit.
If GB wins, the sports book keeps $6,000 from Lions’ bettors (60 x $100) and pays out $4,000 to GB bettors for a profit of $2,000. If DET win, the sports book keeps the $16,000 it took from GB bettors ($400 x 40) and pays out $12,000 to Lions’ bettors for a $4,000 profit.
When the sports book is happy with the profit margin they’re expecting to make on either outcome of a game, they post their odds and enter the market alongside all the other sports books. Some will offer the same or similar odds. Some will offer vastly different odds depending on what their profit margin goals are.
Now the action goes to the bettor who can choose which odds to accept. And sports books do what they can to entice as many bettors as possible because, as we showed, if their margins are right, they’ll earn off every bettor.
But it’s not as cut and dry as “set the best odds and you’ll get the most bettors” because odds take a back seat to the experience and the brand promise.
For example, Bodog invites bettors to live large in the 94 Club; Sports Interaction offers exclusive contests like a $500 NFL Pick’em; William Hill live streams events right on their site.
That kind of affinity and attention to community keeps people engaged in a brand. It shows bettors that the sports book cares. It goes a long way, especially with Super Bowl coming up.
For his part, Jesse picked Sports Interaction because it was the easiest to use. “I’m a stat geek, not a tech geek. I like that I don’t have to think too hard. It’s all just there.
Interestingly, sports betting has very little to do with the game being wagered on. The game itself has the same relevance as the ball does to an actual football game, in that it’s the object being used. You’re not betting on Green Bay over Detroit per se. You’re betting that your interpretation of the matchup is more sound than that of the sports book.
And that’s the part Jesse really loves.
“These guys have billions of dollars and probably an dude inside every locker room in America. So yeah, I get pumped when I know more than they do — and really pumped when I get paid for it.”
Smiling, Jesse leans in a bit closer. “You don’t have to be an athlete. You don’t have to be big or tall. You just have to be good at math and be willing to learn.”
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Odds Courtesy Of Bodog Canada