If you are a big sports fan and watch a lot of sports shows on TV, you will likely hear the pundits and reporters refer to Vegas a lot when discussing odds and the likely outcomes of games. Phrases such as “well Vegas tells us that” or “according to Vegas” are commonly thrown out as if Vegas is the pinnacle of predictions and always gets everything right, which, of course, is not true.
Sports betting odds for moneylines or point spreads are the same as any other market. Sports betting odds are created in a similar way to a lot of things with a supply and demand type approach. Bettors around the world will move the line up or down until it reaches the correct price.
With that said, the way sportsbooks create their odds and betting lines has changed a lot over the years. The sports betting industry used to be controlled by very traditional Vegas oddsmakers, but a lot has changed since online sportsbooks entered the frame, with all the software and algorithms they bring.
But how do these sportsbooks calculate their lines and odds? In this article, we explain the process behind setting these lines and what it means for your spread bets.
How are Sports Betting Lines Created?
There is a process every sportsbook goes through when creating a point spread until the game begins. First, a market-making sportsbook will be the first to release the line, with low betting limits. Depending on which sport this is for, it is typically a couple of hundred dollars. Most market-making bookmakers are not located in the United States.
Bettors are free to bet on those lines, and this creates volatility as the prices move quickly. Anyone is free to wager at these prices, but you must know which sportsbooks to bet at and when they open lines so you can take advantage of the best prices.
Once the price has settled down, other sportsbooks across the world copy the spread. They all use their version of an odds screen that lists what prices their competitors are offering, and they tend to not sway too much from the market.
The following day or late on Sunday depending on the sport, the market-making sites raise their limits, and players continue to move the lines until the price reaches some stability and the game starts.
Who is Involved in Setting Lines?
Today, setting lines and odds involves more people who play major roles than ever before. In the old days, handicappers used to rely on their ‘sixth sense’ when creating odds and there is still an element of that, but the old gut instinct is certainly not as important as it was before this digital age.
Nowadays, statisticians and mathematicians play a big role in how sportsbooks set lines. Many sports betting commentators have noted over recent years that sports betting is now full of data and numbers and having great knowledge of the market.
Using computers and various different software, these statisticians and mathematicians spend lots of hours poring over huge amounts of data, looking at trends that oddsmakers in the past wouldn’t have been able to do.
Sportsbooks Look at Competitors & Copy to Save Money
The competition in the sports betting market is fierce, and the momentum that betting has generated recently shows no signs of slowing down. With that being the case, there has never been more choice for people to place bets, with many quality sportsbooks available. The market has become crowded, meaning there isn’t as much scope for betting sites to differentiate themselves on just lines and odds. Odds are available to everyone as soon as they are released, so certain sportsbooks just copy the lines and odds from each other.
Consequently, lots of sportsbooks are spending less time on creating unique lines and spending less money on oddsmaking. If an operator can browse the web to get a general consensus of what the market dictates for lines and odds, it doesn’t make a lot of sense to waste a load of budget to create their own odds in-house.
Obviously, most sportsbooks adjust their lines slightly to suit their customers, but they don’t deviate too much at all. It is impossible to know which sportsbooks are actively copying each other, because these details are never released.
Sportsbooks Set Own Lines for Certain Events
There are certain events where sportsbooks will set their own lines, but these are rare. For example, if a sportsbook decides to open up a market for a television show, it is likely that they will create the numbers themselves. This is because there won’t be a massive interest among the wider public, so there is no need to go through all the data and copy competitors.
They may enlist the help of some oddsmaking software but will likely just do it in-house.
Summary
Of course, no one can be 100% certain that their prediction of a game will be correct, and the best way to use your knowledge of how oddsmakers set lines for the game is by understanding the game. This will help you make more informed decisions and that will increase your chances of winning.
