Have you ever though, how does sports betting work, really?
You’re not alone.
Millions of Americans are waking up to new legal ways to bet on sports. With these new options in place, people are curious about how sports betting works.
This post explains the basics of sports betting, from the simple concept of betting on sports to the more complex ways to wager on real sports action. The information here can prepare you to place your first legal sports bet or offer a brush-up on skills you’ve lost over the years.
What Is Sports Betting And How Does Sports Betting Work, Really?
At its most basic, a sports bet is just a wager on the outcome of a sporting event. All it requires is two people, a little money, and a sporting event they can watch live or on TV.
You don’t need a sportsbook or an organized system to bet on sports. You can place a friendly bet at a bar or anywhere people gather. In some ways, this is the best way to bet on sports, since you don’t have to pay a fee to place your bet, and there’s no odds system in place handicapping or benefitting either side.
Here’s an example:
Last November, I was watching the Cowboys-Broncos game in Dallas with a buddy. If you’ve never met a Cowboys fan, just know that they’re enthusiastic about their team. I could see an upset coming a mile away, but my buddy absolutely lives and breathes Cowboys football, and he was blind to it.
I bet him $100 straight up that Denver would win. He took the bet. Dallas proceeded to lose, 30-16, and my buddy owed me $100. Nobody charged any vig. I didn’t have to put the money in escrow. It was just a friendly bet between two buddies, and he paid me right away.
On its face, sports betting just means placing wagers on the outcome of sporting events.
What Sports Can I Bet On?
The list of available markets at traditional brick-and-mortar sportsbooks usually includes all the major pro sports (including some international leagues), bets on horse and greyhound racing, and a handful of other markets. College sports like basketball, football, and baseball are heavily represented.
In a general way, you can expect more betting options at online US-facing sportsbooks. The list of available markets is a little different for each one, but you can expect around two dozen sports markets up and running at any given time.
At the time of this post, I counted 26 available markets at BetOnline, 28 markets at Bovada, and 28 at BetUS. These include bets on political events, entertainment news, and other unusual markets not generally available at a land-based book.
Having said all that, you can bet on any sport you want. If you set up a private bet between yourself and another person, you can bet on any sporting event that reports an outcome. Want to bet on your local high school football championship game? Find someone willing to accept your terms and you’ve got a betting market.
How Sports Betting Odds Work
Odds are numbers used to create betting markets. These numbers are presented in a standard format so that bettors and operators are all on the same page. In the US, the most common form of odds used is called American odds.
American odds are a measure of how much you stand to win relative to how much you bet, presented in $100 units. If that’s a little confusing, know that American odds are made up of two parts. The first is a plus or minus sign (+/-) and the second is a number.
A team’s odds (in the American format) will look something like this: +120. This will be listed next to the team’s name. When a team is listed with a plus sign, they are the underdog. A bet on this team will pay off more than a bet on a team listed with a minus sign. That minus sign indicates the team is the favorite.
Here’s a real-world example from a 2021 NFL game:
Kansas City -233
Cleveland +197
The visitor is always listed before the home team. So here, Kansas City is traveling into Cleveland to face the Browns at FirstEnergy Stadium.
So, what do the numbers mean?
In the case of the underdog (Cleveland in our example), a successful bet on the Browns would return $197 for every $100 wagered. In the case of the favorite (Kansas City in our example), you’ll win $100 for every $233 you bet if the Chiefs pull off the expected win.
In this example, Kansas City is a heavy favorite. The book is so sure of a Chiefs win, they won’t pay out $100 until you drop more than twice that amount. The book wants people to back Cleveland so that their books are balanced. They’re encouraging those bets by offering Browns backers almost a 2:1 payout.
Check out this post on how football odds work for more details on the NFL betting market.
Common Types of Sports Bets
The example above is for the most basic sports bet – a bet on the money line.
Money line bets, in which bettors simply pick an overall winner, aren’t the only way to bet on sports. Over the years, books have created a lot of different ways to entice bettors to drop a little extra cash.
Here are short guides to the major ways to wager on sports besides the money line described above:
1 – Point Spread
Point spreads are a kind of margin of victory imposed by books to create a unique betting market. This is by far the most popular way to bet on basketball and football, outpacing money line and game totals by a large margin.
With a point spread, the favorite must win by a certain number of points, runs, or goals for a bet on the favorite to pay out. The underdog can lose by fewer than that number of points (or win outright) to pay out.
Using our Kansas City and Cleveland example from earlier:
Kansas City -5.5
Cleveland +5.5
A bet on the Chiefs would only pay out if they won by 6 points or more. A bet on the Browns pays out so long as the Browns win outright or lose by 5 points or less.
How did it turn out?
Kansas City got the win, but only by 4 points. Browns backers won their bets since the spread was 5.5, and the real margin of victory was only 4.
Point spreads come with standard odds. Most point spread bets carry odds of -110 for both the favorite and the underdog. Books will sometimes adjust these odds to entice bettors to back one or the other side of a contest.
2 – Game Total
Also called over/under bets, game totals bets are placed on the total of two teams’ final scores.
Books list game totals bets simply – they list a number next to a contest. If you think the total points scored will be higher, you back the over. If you think the total points scored will be lower, you back the under.
Let’s use our Chiefs vs. Browns example from above again:
Kansas City O 54.5
Cleveland U 54.5
That’s it.
Obviously, you can’t score a half-point. The number 54.5 means under bets pay off if the total is 54 or less, while over bets pay off if the total is 55 or more. Ultimately, the game total was 62, so bets on the over paid off.
3 – Run Line/Puck Line
Run lines and puck lines are only used in baseball and hockey, respectively. These two sports produce low point totals and don’t lend themselves to a traditional point spread. Therefore, books use a fixed point spread for both sports. In baseball and in hockey, the run line/puck line will always be 1.5 points.
What does that number mean?
On the run line or puck line, the underdog can lose by 1 point and still pay out a win. The favorite can win by just one run and still “lose” in the eyes of the book.
That 1.5-point cushion forces the favorite to win by a significant amount, rather than just squeak by with a one-run or one-point win.
One weird thing about betting on the run line – favorites get plus money and underdogs get minus money. That’s because the favorite now has a big hurdle to jump before paying out, while the underdog gets a nice cushion to prevent a loss.
Run line or puck line bets are the only time in sports betting when you get plus money odds on a team favored to win. For that reason, and because the fixed nature of the spread makes it seem more beatable, run line and puck line bets are popular in the sports that offer them.
5 – Parlay
A parlay is a combined bet. You can parlay anything together – money lines, game totals, point spreads, even exotic bets.
The point of a parlay is to increase your potential payout by combining more than one bet.
Books offer better payouts for parlays because they’re harder to pull off Parlays pay out only if every bet on the parlay ticket is a winner.
6 – Futures & Props
These are the so-called exotic bets, the ones that go outside the usual spread and money lines.
Futures are bets on futures outcomes or events in sports. A common futures bet is picking a league’s eventual champion, often long before a season even begins. Books release odds early in the year and adjust them as the season plays out.
Props, short for propositions, are bets on things outside the usual scope of sports betting. Props can be anything verifiable or based on statistics or real game performance. A common prop bet is picking the first team to score. Props come with long odds and potentially big payouts.
Are Odds Different at Different Books?
Once upon a time, sportsbooks offered different odds for the same contest. That’s because oddsmakers handicap and analyze games differently. An oddsmaker at one book might give a team a lot bigger chance of winning than an oddsmaker at a different book.
This paved the way for things like arbitrage and bet-hedging, tactics that attempt to guarantee a win using the differences in odds between books.
Imagine you back the Yankees to the tune of $100 to win the World Series way ahead of the start of the season, getting +3000 odds. The season plays out, and New York makes it to the big game. By backing their opponent on the money line in each game, you’re protecting your bankroll. Either way the Series goes, you’re going to be in the black.
Check out this post on bet-hedging for more information on how to hedge bets.
These days, books tend to follow other books when they set their lines. Some books use advisory services that help them set odds in such a way that hedging bets and finding opportunities for arbitrage are a lot more difficult.
To put it plainly, these days most sportsbook odds are similar enough that bet-hedging and other tactics are nearly impossible. The Internet has all but standardized odds, and you’re unlikely to find a difference significant enough to take advantage of.
Conclusion
This post explains how sports betting works.
With new ways to gamble on sports popping up all over the country, people who wonder how sports betting works are in a good position to get in on the ground floor of an emerging industry.
At its most basic, a sports bet is just a wager between two entities on the outcome of something outside of their control. You can replace the sporting event with a coin flip or a list of random numbers and it’s essentially the same thing. Sports betting is gambling, whether it occurs through an online app, a sportsbook window, or a handshake between friends.