| A lot of people new to Sports Betting ask me to | | | | Sometimes the books break even. Sometimes they |
| explain to them the basics of handicapping. One of the | | | | make the juice. $300 risked on Yankees plus $100 |
| most common questions I get is about "Sportsbooks" | | | | risked on Colorado = $400 in wagers, and $50 profit. |
| so I have decided to write a multi-part series about | | | | Divide that by 2, because sometimes the books win, |
| sports betting, sports investing, and how to make | | | | and sometimes they break even. In this situation, given |
| sports picks like a handicapper. | | | | both ways the game can end, the books are |
| Sportsbooks operate by taking wagers. Wagers | | | | averaging $25 profit per game for every $400 risked |
| create income for them in a number of ways. Firstly, | | | | which is 1/16th or about 6% profit per game, based on |
| most sportsbooks offer a variety of wagers on | | | | whatever volume of business they do. Considering the |
| everything from sports propositions to questions about | | | | billions of dollars in wagers, over and over again, you |
| celebrities and politicians. People can wager on the | | | | can see how taking wagers pays them big money IF |
| outcome of games, whether the coin toss before the | | | | they can split the demand properly between 2 teams. |
| game will be heads or tails, whether the 1st play will be | | | | Most people understand this is how the books work, |
| a run (football), whether the total points of 2 teams will | | | | and this is how they make money. |
| go over a given number or under, whether democrats | | | | Some sports have spreads like NBA, and NFL, where |
| or republicans will win in any election year, whether a | | | | betting on the Indianapolis Colts versus the Houston |
| given movie star couple will get divorced or stay | | | | Texans means that there will be a line. |
| together during a given time period. The types of | | | | For example, Indianapolis as the favorite, again has a |
| wagers proposed by the sportsbooks are numerous, | | | | negative number - 14.5 lets say. They now have to win |
| and the odds vary as well. | | | | by over 14 points to cover the spread and pay their |
| But basically any wager deemed a favorite, will have a | | | | bettors. Houston Texans backers get 14.5 points |
| number like - 110, -165, -300, etc. The negative means it | | | | positive, which means they can lose by 14 and still get |
| is the favorite, and the number behind it means that is | | | | paid. Because this spread splits the demand, the |
| how much you have to bet to win $100. In sports like | | | | money doesn't have to split demand - so the money |
| baseball where there is no spread, if a team is favored | | | | paid for the most part is even. |
| to win like the NY Yankees, -300 means betting on | | | | Indianapolis Colts - 14.5 pays (-110) |
| them, you must bet 300 to win 100. Conversely, a | | | | Texans +14.5 pays (-110) |
| team like the Colorado Rockies might be an underdog | | | | Each bettor bets 110 to win 100, and if the wagers are |
| (a team not subject to huge amounts of demand - | | | | even on both sides, the 110 lost by the losing team's |
| mostly because they are struggling) may have a line | | | | backers pays the 100 profit to the winning teams |
| like +250. Now, laying 100$ on the Rockies, pays back | | | | backers. $10 is left as juice to the books meaning in |
| $250. This large payout will sway some bettors to | | | | this scenario $220 in wagers pays $10 in juice - the |
| take a $100 risk on the Rockies because of the large | | | | books make 1/22 of all the business volume taken if |
| payout. The -300 Line on the Yankees will back off | | | | the books balance. That converts to between 4 and 5 |
| quite a few bettors who will not want to risk the farm | | | | percent profit guaranteed. |
| to win a pea ($300 risked pays back $100). So | | | | The sportsbooks goal is to balance their sides, make |
| demand evens. and the books will continue to adjust | | | | their juice, and keep customers happy and loyal, by |
| the line until game time, making subtle moves to even | | | | paying ontime, and providing excellent customer |
| demand between both outcomes. once the wagering | | | | service. Then the juice rolls in day after day. You can |
| is close to even, you will notice that | | | | see that 4 to 8 % profits are small, but considering the |
| -300 bettors who lay money on the Yankees win the | | | | huge number of business volume taken, the profits are |
| $100 risked by Rockies bettors. If both sides are equal, | | | | unbelievable. A 3 hour sporting event can put |
| and Yankees win, the Rockies losses payoff the | | | | thousands if not hundreds of thousands of dollars in |
| Yankees winners, who get back their $300 risked plus | | | | the sportsbook's bank accounts. It can put Millions of |
| $100 profit. The sportsbook breaks even. | | | | dollars in all of the different sportsbooks accounts |
| Now if the Rockies win, they get back their $100 | | | | across the industry, when you consider the multitude |
| risked, plus $25o because the line was (+250). The | | | | of sportsbooks where people are betting. Not bad for |
| $250 is paid for by the $300 lost by Yankee bettors, | | | | a three hour sporting event, and yet it goes on day |
| and the sports book keeps the other $50 which is | | | | after day after day. |
| what we call juice. Juice is the fee for betting. | | | | |