JUMP TO:
- How do sportsbooks set betting lines?
- The role of public money in line setting
- Sharp Money: What it is and why it matters
- Line Movement Explained: Why odds change
- The Juice (Vig): How sportsbooks make money
- How bettors can read line movement like a pro
Sports betting is a science, whether you're on the betting side or the sportsbook side. We wouldn't have betting without linemakers.
In turn, we wouldn't have lines without the betting public and sharp bettors. It's a constant synergy, and the lines often shift as much as the tide.
Understanding how sportsbooks set lines — and why lines shift — is a key part of understanding betting as a whole. You can't truly grasp the concept of betting value if you don't comprehend how the odds are set. It's not always just about win probability.
The sportsbooks' job is to make money off bettors and to avoid taking on too much liability with certain bets. Your job is to try to make money off the books.
Don't you think it's a good idea to understand how said books arrive at the odds that they set? It's just like sport: To beat them, you often have to think like them before acting.
Let's discuss in greater detail how sportsbooks set betting lines, which factors go into linemaking, and how you can use this newfound information to your advantage as a bettor.
How do sportsbooks set betting lines?
To improve at sports betting, we need to understand the factors that go into sportsbooks' lines. Oddsmakers follow a combination of (a) sophisticated statistical trading and modeling, (b) analysis of breaking news, and (c) the latest betting action from the public.
Odds do not simply reflect the sportsbooks' final score projection, but rather the amount that will give the book the greatest chance of winning or at least not taking on too much liability.
The core mission every time: Guarantee a profit.
The role of public money in line setting
When public money shifts sharply one side or the other, sportsbooks obviously must act.
If the book is taking too much action on one potential result, it can get taken for a lot of money if that result does in fact come to fruition. Thus, it will balance the odds by shifting them and, in turn, lowering their liability with that result.
Public betting can be an even greater influence to odds than a team or player's recent form. Odds allow sportsbooks to balance the action and manage their financial risk. It's like a seesaw: The bettors influence the books to shift the lines, and then the shifted lines influence bettors to bet the other side and balance things out.
Sharp Money: What it is and why it matters
"Sharp bettors" or "sharps" are professional sports bettors who exercise discipline, research games thoroughly, and turn consistent profits over a long period of time. They treat betting as an investment opportunity, not a hobby, and they approach wagering analytically.
As you might expect, sharp money influences odds. In fact, the influence can actually be quite significant. A few large bets from sharps might move the lines more than the vast majority of the general betting public.
Sharps have a proven track record of winning. Sportsbooks respect their bets and adjust odds to reduce liability surrounding them.
It's all about risk management. If a sharp who regularly wins money likes one side, it stands to reason that the book would worry about that side winning and that sharp winning a bunch of money on the bet. So, the oddsmakers shift the line and try to get the more casual or "square" bettors to bet the opposite side of the sharp money wagering.
When sharps identify an undervalued side, they place big bets, sometimes as soon as lines go public. This early betting action can be enough to trigger sportsbooks to change the line one way or the other.
Here's an example: sharp money comes in on a -6.5 point spread favorite in an NFL game. The book then moves the line to -7 or -7.5 to generate more action on the underdog. The majority of the betting public then opts to bet the 'dog to cover the +7 or +7.5, and the total betting is thus evened out a bit.
Though not a concrete proof of success, beating the final odds with a more favorable bet earlier leads to positive closing line value (CLV). Such a trend often indicates that a sharp can consistently gain an edge.
MORE: Betting terms glossary
How to know when sharp money is being bet
A key indicator of sharp action is "reverse line movement." This happens when the betting line moves in the opposite direction of the majority of public bets.
If two-thirds of public bets are on Team A at -6.5, but the line moves down to -6, it suggests that sharps are betting heavily on the other side. Sportsbooks respect the sharps' opinions more than the sheer volume of public money, and traders will adjust accordingly.
Many sports betting sites show the data of the betting public, revealing both the percentage of bets ("tickets") on a certain side and the percentage of money bet ("handle"). If a team has a significantly lower percentage of bets but a much higher percentage of money, it indicates significantly big (and potentially sharp) wagers.
Sharp money tends to move lines early, too. Sharps often bet on opening odds to get the best value before the market adjusts. If a line moves sharply soon after its release, it's a good indicator that sharps have been moving it.
Watch for "steam" moves. A steam move is a sudden and significant shift in the betting line across multiple sportsbooks, caused by large bets placed by sharps. However, by the time you see a steam move, the value the sharps found is likely gone.
Always shop your lines by monitoring line movements across different sportsbooks. Sharper, more respected sportsbooks like Circa Sports and Pinnacle are often the first to adjust their lines based on professional action. Comparing their lines to those of other books can reveal where the sharp money is flowing.
(Caution: Pinnacle is an offshore book for US bettors. We recommend only using its efficient market information as a resource to help you place bets in the United States with American odds.)
Line Movement Explained: Why odds change
As we've alluded to already, lines move for myriad reasons, primarily based on:
- Adjusted game projections
- Injuries
- News that favors one side above the other (coaching decisions, starting lineup changes, weather conditions, etc.)
- Public betting
- Sharp betting
The Juice (Vig): How sportsbooks make money
The juice, or vig, is the part of the odds that goes directly to the sportsbooks aka the house. Short for vigorish, the vig (or juice, house edge, or "the cut") is basically a tax that's built into the odds. It's the books' cost, or commission fee, for allowing you to make the bet.
The vig is the main way sportsbooks ensure they turn a profit, along with setting and shifting lines. If the books influence the betting public to keep the total amount of bets close to 50/50 on either side, the vig will clean up regardless of the result of the game or match.
Let's say you're betting on a hypothetical coin-flip of a game. The odds may be +100 on one side, -100 on the other. The standard vig for a fair and close spread or over/under totals bet is -110, with the extra $10 going to the sportsbook. Thus, the book makes money on the bettor before the bet has even been settled.
How bettors can read line movement like a pro
Leaning how to bet involves many steps, and one of the most important steps is to find value in line movement.
The best way to read line movement is to take note of opening lines, then track them from there, unless the information dictates you should bet immediately.
When lines first go live, they may contain inefficiencies that don't take into account any reasons odds may eventually change, as listed above.
Using third-party services with odds screens and line movement trackers will make the process easier, but even a cursory check on each day will at least provide a crumb of potential value if you notice a drastic change.
A more heavily invested way to accomplish this is to create a process that produces your own lines every week. Through data research and application of methodology that impacts lines (e.g. Using implied point totals, season-long trends from oddsmakers, and more information), even bettors who consider themselves recreational can at least give themselves additional resources to use.
Of course, this won't guarantee you become a pro bettor or sharp instantly, but understanding how lines are made and using your own insight could prove at least moderately successful over time.