Sports Wagering - Frequently Asked Questions

What is sports wagering?

Sports wagering is the activity of wagering on the outcome of events occurring within a sporting contest. Popular sports wagers are: money line, over/under, points spreads.

Money Line: a bet on the outcome of the game.

Over/Under: a bet on the whether the combined score of the game will be either over or under a predetermined level. The predetermined level is set by the bookmaker.

Points Spread: a bet on the outcome of the game given that one of the teams gives the other team with a certain number of point advantage. Run-line and puck-line are the point spread bets in baseball and hockey.

How do sports betting markets work?

Sports betting lines adjust up or down so at the time of the game there is an equal amount of money wagered on both sides of the bet. This ensures that the the bookmakers profits regardless of the outcome of the bet.

How do bookmakers profit?

Bookmakers profit by charging a commission to place a bet. This commission is in form of paying out different odds on each side of the bet. Bookmakers are in the business or profiting regardless of the outcome of the bet.

Can bettors profit?

Yes. Sports betting markets are not necessarily efficient. This is a result of bookmakers setting the odds to profit regardless of the outcome of the bet not to predict the outcome of the game.

How can bettors profit?

Bettors can profit by finding inefficiencies in the sports betting market. Market inefficiencies can be found by applying probabilities to a belief about the outcome of the bet and calculating the expected return. An example of a probability of a belief of the outcome of the bet is: I think there is a 65% chance that the New York Yankees will win the game against the Toronto Blue Jays.

What are expected returns?

Expected returns are the return a bettor can expect if the game were to be played many times. Because a game is only every played once, a bettor must bet on multiple games that have positive expected returns to profit in the long run.

Do expected returns change when the lines change?

Yes. Therefore a bettor must calculate the expected return for each and every bet. We have an expected return calculator for every game that we predict. We also calculate the expected return of the wager based on the lines set at 3am.