Have you noticed the recent bombardment of sports betting advertisements? By federally legalizing sports gambling in 2018, the Supreme Court opened the door for twenty-seven states (including D.C.) to allow sportsbooks to operate within their borders with more joining practically every month. Consequently, sportsbooks have entered into a marketing arms race by trying to out-advertise, out-bonus and out-incentivize each other. If you’re already into horse betting and have considered adding sports betting to your repertoire, you couldn’t pick a better time than now. By understanding a few crucial horse/sport-betting differences outlined below you can steepen your learning curve and take advantage of the brave new world of legal sports betting.
Structural Differences Between Horse Betting and Sports Betting
Parimutuel Odds vs. Fixed Odds
Though the structure of sports and horses may appear similar, in reality they’re as different as poker and blackjack.
In poker, players contribute to a big pot split by the winner(s). The house isn’t directly involved, they just facilitate the betting amongst players and extract a small fee. In horse-betting, the structure is largely the same. The payouts come from pooling the wagers of other players, not from competing with the house.
Blackjack, unlike poker, is played directly between an individual and the house. No matter how many others may be involved in the same game, an individual only needs to beat the dealer to profit and take the money directly risked by the house.
Like poker, the parimutuel system allows the track or ADW to remain almost entirely passive. Tracks let the flow of money into each betting pool determine odds and payouts often causing drastic changes up until the race. Unfortunately for tracks, many would-be bettors find those constantly shifting odds off-putting. To an amateur, betting $10 at 10:1 only to have shrink to 1:1 by close can be disheartening.
Alternatively, sportsbook’s use a fixed odds format. Unlike horses, sportsbooks actively set and adjust odds based on their own projections and risk tolerance. So the payout at the time the bet is placed will never change for that bet in particular. A $10 wager at 10:1 in a fixed odds format stays that way for the bettor until the bet is graded. Fixed odds require sportsbooks to be more proactive in setting & changing the odds and accepting risk since they are directly responsible for payouts at the end of the day.
Considering the rapid growth in sportsbook’s revenue relative to racetrack’s, the risk appears worth the reward.
How Do Sportsbook Odds Work?
Before you can beat the sportsbook, you need to understand how and why a sportsbook sets odds. Let’s use an overly simple example:
You and a friend bet on a coin flip at a sportsbook. They offer the following odds: Heads (-110) or Tails (-110).
This “-110” number is the “American Odds” system. A “-” sign, means you’re risking $110 to profit $100. If it was +105 (without the “-” sign or sometimes just 105) you’d be risking $100 to win $105. Often a “-” implies you’re betting on the favorite or more likely outcome. A “+” sign (note: a number with no + or – implies a “+”) implies the underdog or less likely outcome. We’ll explain why both options in our coin flip are negative in a moment. Back to the example…
You place $110 (at -110) on heads and your friend bets $110 (at -110) on tails. Combined, you both risk $220.
Thankfully, the coin lands heads! The sportsbook takes $110 from your loser friend and hands you $210 (the $110 you risked and your $100 profit). Notice what’s missing? The astute amongst you might notice the winner paid a ~4.5% tax. Where, you ask?
Instead of using a sportsbook, let’s say you each risk $110 on a coin flip by just placing the money on a table. If it lands heads you’d collect the entire $220 right?
But a sportsbook has to profit somehow, and they profit by taxing wins. They effectively charged you $10 (~4.5% of the $220) for the pleasure of placing bets with them. That 4.5% is called the vig (or the juice).
The vig is the sportsbook’s “takeout.” Like the takeout, the vig can vary between books, but it typically stays between 4-5%.
The Advantages of Fixed Odds
The biggest advantage of fixed odds is, well, they are fixed. If I place a bet at 2:1, I get 2:1 no matter how much they change for everyone else in the future. Unlike ever-shifting parimutuel odds, the odds on my ticket stay as is.
This can be a powerful advantage for the sharp sports bettor. For example, many sportsbooks release NFL lines almost a week before they are played. An experienced sports bettor (whether they operate on a predictive model or proprietary news/information) could quickly take advantage of what they consider a poorly priced game.
It’s not unreasonable to fix your odds +200 (2:1) at open and see the same bet close at +100 (1:1). Experienced bettors call this Closing Line Value (CLV) and it’s the gold standard winning bettors seek.
A Balanced Sportsbook
Sportsbooks strive to marry the probability of each outcome with the amount of money on each outcome. So in a 50/50 coinflip, the sportsbook wants 50% of the money on heads and 50% on tails.
But what if a book offered +200 on heads and -250 on tails on the same coinflip? Ostensibly it’s telling the bettor it wants ~30% on heads and ~70% on tails. If it can strike that balance, it will walk away with their vig and never sweat the outcome.
However, if everyone knows the probability is 50/50, it seems extremely unlikely the sportsbook will get that 30/70 balance, right? This event would be considered “unbalanced.” The probability of the outcome (50% heads, 50% tails) won’t match the amount of money the sportsbook has on each possible outcome. A book this regularly unbalanced won’t stay in business for long.
How a Book Balances Different Types of Bets
So how does a book correct this “unbalanced” example? It needs to incentivize action on the other side of the bet. How it does that depends on the type of bet:
Moneyline bets are the simplest type of bet a sportsbook offers. Like horse-betting heavy favorites garner small returns, while big underdogs could generate massive ROI.
If a book has unbalanced action on a moneyline bet, the only way to incentivize the other side is to change the odds. In our unbalanced coinflip above, they’ll disincentive betting on heads (lower the odds) and incentivize betting on tails (increase the odds) until they reach their balance.
Sportsbooks can also incentivize betting underdogs by giving them a headstart in points known as a Spread. If you see a team is +6.5, think of it as having a 6.5 points headstart. As long as they dont give away that (theoretical) lead, you win your bet. So even if the favorite wins the game by 5, you win your bet. Conversely, if a team is -6.5 they’re starting 6.5 points behind. They’ll need to win by 7 or more for you to profit.
With Spreads, sportsbooks have two levers to adjust. Spreads list both the Spread (-6.5) as well as the American Odds (-105, +105 or 105). If a team is -6.5 (-105) that means the team has to win by at least 7 points and you’ll have to risk $105 to profit $100.
With the Over/Under who wins isn’t important. Instead, all that counts is how many combined points are scored. If you think a game is bound to be a shootout but you don’t know who will win, the Over might make sense.
Similar to the Spread, Over/Unders will have both the total score (say 50 in the NFL or 222.5 in the NBA) as well as the American Odds (-105, +105 or 105). Like the Spread, this gives the sportsbook two levers to pull in order to balance the action.
What Horse Bets Are Most Like Sports Bets
The following isn’t a comprehensive list of horse and sports bets. It’s just a simple list designed to show which sports bets might match your horse betting risk preferences.
Low Risk, Low Odds
Win = Moneyline, Spread, and Over/Under
Betting on the Moneyline, Spread, or over/under is the most common bet in sports and is similar to betting on a horse to simply win. Books push one specific Spread (the one closest to -110 on both sides) but most also offer alternatives at different odds.
Place and Show = Spread or Over/Under Alternate Lines.
A horse is more likely to show than win. Consequently, the odds are lower. Similarly, a favorite is more likely to win by 3.5 than 6.5 (or a total of 45.5 compared to 50). Alternate lines offer you the opportunity to bet a more likely outcome for a worse payoff.
However, alternate lines for Spreads and Over/Unders also offer you the chance to increase your payout for outcomes the sportsbook views as less likely. If a Spread is 6.5 (-110), but you think the favorite will win by 10, you might find a bet for -9.5 at something like +135.
Medium Risk, Medium Odds
Boxing an Exotic = Round Robins
While Round Robins also exist in both horse and sports betting, boxed exotics do not. In my opinion the Round Robin is the closest thing you’ll find so we’ll dive in a little here.
⅔’s, Trixies, Patents, and Bankers
A $5 round robin (just like the tournament style of the same name) creates a series of small parlays instead of one large one. For example, let’s say you like:
The most common type of Round Robin is a ⅔. It’s three, $5 bets on each two team combination: A/B, A/C, and B/C. Each bet will have different payout based on how the various odds combine (+110 & +100 pays different than -105 & +100 and will also be independent of one another. Let’s say Team A and Team B cover. You’d profit $11 from your A/B parlay, but lose the other parlays (-$10) for an overall win of $1.
A Trixie is a four bet Round Robin: all the bets in the ⅔ plus a 4th, $5 bet that all three bets also hit. With the same game results above we’d tack on another $5 loss on A/B/C parlay turning our $1 win into a $4 loss.
A Patent is a seven bet Round Robin: one parlay that all three teams cover; three, two team parlays on each combination; and 3 individual one bets that each individual team covers. Using our same example above would turn our $4 loss into a $1.50 profit.
If you like using Key bets in your various exotics, a Banker is the same idea: it boosts your odds by making one bet a requirement and the others conditional.
High Risk, High Odds
Same Game Parlays = Vertical Exotics
As the name might imply, same game bets are betting on various events within the same game. Not all sportsbooks offer same game parlays due to some events being highly correlated. But same game parlays are quickly becoming a popular selling point for online sportsbooks to attract customers with large payouts.
Instead of an exacta, you could try parlaying the Spread and Over/Under together. Before you ask, no you can’t parlay moneylines and Spreads .
If you want to delve into the trifecta or superfecta type parlays, you might try adding the Halftime Over/Under to your Spread & Over/Under parlay.
Multigame Parlays = Horizontal Exotics
While same game parlays are a newer phenomenon and not as widely available, multi-game parlays are as old as gambling itself and available everywhere. Parlaying 5 moneylines is your sports-betting Super Hi-Five.
If you’re a horse bettor looking to expand into sports betting there are plenty of options. Once you get the hang of fixed odds compared to pari-mutuel odds there are plenty of bet types that will seem similar to horse racing. Furthermore, you can use tools at Unabated such as our Hold Calculator to figure out how good or bad a market is. We also have plenty of articles to teach you how betting is done in a variety of sports in our Content Library.