1. How To Make Odds
2. How Do Oddsmakers Make Odds
3. How Do Oddsmakers Make Odds Win
4. How To Create Odds
5. How Do Oddsmakers Make Odds Against

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How To Make Odds

1. The odds they set eventually determine how much in wagers a bookmaker is likely to take in, and how much money they are likely to make. The act of setting the odds for a sports event is known as pricing the market. There are a number of aspects involved in pricing up markets for sports events. The primary goal is to make sure the odds.
2. The point spread. The “great equalizer.” Just how do sportsbooks come up with this all-important number? Most of the time, oddsmakers try to come up with a point spread that creates the least risk for the sportsbook and effectively guarantees a profit.
3. So it’s a surprise to see Oddsmakers only giving the Cubs +400 odds and bettors only placing 8.7% of total bets on the Cubs to win the division. In a division that’s as wide open as any in MLB, the Cubs have as good a chance as anyone to win it due to their strong defense and expected offensive bounce back.

The point spread. The “great equalizer.” Just how do sportsbooks come up with this all-important number?

Most of the time, oddsmakers try to come up with a point spread that creates the least risk for the sportsbook and effectively guarantees a profit.

What is the key to that process? When do sportsbooks diverge from this time-tested approach? Below, we explain in detail the standard process for setting the point spread and why some riskier sportsbooks often take a slightly different approach.

NB: This article assumes a certain level of background knowledge about what a point spread is. If you lack that foundational knowledge, consider reading this point-spread explainer first in our comprehensive section on sports-betting basics.

How Are Odds Determined? Odds are engineered to attract equal action on both sides of a betting line. In a perfect world, a sportsbook receives equal betting volume on both sides of a wager then, win or lose, they’ll make 5-10% on the juice (or ‘vig’). Oddsmakers deal in a theoretical world because they don't actually take bets on the lines that they publish. Oddsmakers make their money by selling their lines to media outlets, sportsbooks, etc. These are the lines you see in your local newspaper or hear on the radio.

The Point Spread Aims to Attract Equal Betting on Both Teams

Many people assume that the point spread is designed so that both outcomes in a game—(1) the favorite covering and (2) the underdog covering—are equally likely given the relative strength of the teams.

That’s close, but not quite right.

The majority of the time, sportsbooks try to create a point spread that will attract equal betting on both teams. Sometimes this is equivalent to a results-oriented spread—one which creates a truly level playing field—but not always because the public isn’t necessarily a rational actor.

Why do sportsbooks want equal betting on both teams most of the time? Simple. It’s a risk-free way to make money.

Sportsbooks try to create a point spread that will attract equal betting on both teams.

Look at any slate of Sunday NFL games and you will see that the payouts on the two teams in any given game are about -110, meaning bettors have to wager $110 to win $100.

The same goes for basketball betting. The image below illustrates four games on a generic NBA betting menu. As you can see, all eight teams involved in the four games have a -110 payout against the spread.

So if the sportsbook takes $550 worth of bets on the Dallas Mavericks +7.0 and $550 worth of bets on the Orlando Magic -7.0, then it has collected $1,100 in wagers. No matter who wins, the sportsbook will only have to pay out $1,050 (the $550 wagered + $500 in winnings), leaving it with a small profit.

If there is equal money on both sides, there is no risk for the sportsbook.

They don’t turn a huge profit on any single game but, to paraphrase Peter in Office Space, they do it from a much bigger tray and they do it a couple of million times.

Over time, it adds up a lot.

Why Isn’t a Result-Based Spread Always the Best Choice for a Sportsbook?

As a collective, the general betting public is not always a rational actor. People will bet on certain teams more heavily than others, even when that team doesn’t deserve it based on its quality of play.

Teams that attract an irrational amount of betting money are known as “public teams.” You will find them in every sport. They tend to be the high-profile teams with massive fan bases and (sometimes but definitely not always) history of success.

There is no universally accepted grouping of public teams, but you won’t find much argument that the teams listed in the table below qualify.

A Conservative List of “Public” Teams

If and when sportsbooks list public teams at so-called accurate odds, the public is likely to bet on them more heavily and potentially put the sportsbook at risk of a loss if the public team covers the spread.

For that reason, teams like the Dallas Cowboys and Duke Blue Devils will often be bigger favorites than the analytics indicate they should be.

Sometimes Sportsbooks “Take a Position” on a Game/Team

Sportsbooks are not generic, one-size-fits-all operations. Just like investors, some are more risk-averse than others.

Many sportsbooks are willing to “take a position” in certain circumstances, which basically means that they will set/leave the point spread so that the sportsbook needs a certain result in order to come out in the black.

When you see one sportsbook open a point spread at a different number than its competitors, those oddsmakers are likely taking a position on that game. They know that the lower/higher spread will attract bets on the team that is laying fewer/getting more points, but they are okay with that because their analysis says that the other outcome is more likely.

Say the Duke Blue Devils were slated to play the Wofford Terriers, an upstart mid-major still unknown to the general betting public. Four sportsbooks opened the spread at Duke -14.5, but a fifth sportsbook has crunched the numbers and thinks that Duke is only 11 points better than Wofford.

When you see one sportsbook open a point spread at a different number than its competitors, those oddsmakers are likely “taking a position” on that game.

In such circumstances, the fifth sportsbook may choose to open their spread at Duke -13.5. They will know that the lower spread will attract more money on Duke than Wofford., but their analysis indicates that booking more money on Duke -13.5 creates positive expected value for the company. The most likely result, according to their statisticians, is that Wofford will cover the 13.5-point spread.

If Wofford does cover, sportsbook 5 will make a much greater profit than it does on games where they do not take a position. If Duke, covers, of course, sportsbook 5 will lose money on that particular game.

Sportsbooks don’t always need to be correct when they take a position; they just need to be right often enough to be profitable on the whole. Chances are that the sportsbook you’re using has done just that. It’s still in business after all.

If you aren’t yet using a sportsbook, then it’s high time to check out our sportsbook reviews to find the one that best suits your betting needs. Always remember, never ever under any circumstances bet more than you can afford to lose.

How Do Oddsmakers Make Odds

Whenever there’s a playoff or championship game, you’ll hear on the news about how Las Vegas has “set the line” at some number, or favors one team or the other by a certain amount of points. When they say “Las Vegas”, what they really mean is one of a handful of influential sports books or consultants based in the city.

How Do Oddsmakers Make Odds Win

Most often this refers to the Las Vegas Sports Consultants firm, who set the opening lines for the majority of Nevada’s casinos. However, some casinos employ their own teams of people to set their opening lines, and to adjust them independently. This is especially true of casinos that take action on non-sports futures, such as who is going to be the next President or American Idol.

How to Become a Professional Oddsmaker

How To Create Odds

It’s a bit of a mystery as to how these behind-the-scenes oddsmakers get their jobs. After all, you can’t go to college and get a degree in point spreads. An advanced degree in statistics would seem to be an obvious place to start, as sports predictions are now largely based on complicated computer simulations. But some of the most prominent oddsmakers in Vegas simply started out on the casino floor and worked their way up.

Johnny Avello, chief oddsmaker for the Wynn, began his career as a dealer and ticket writer, gradually rising through the ranks of casino management. He now sets odds on everything from horse racing to dog shows and the Miss America pageant. Jay Rood, the Vice President of MGM’s race and sports books, had a similar career path – after obtaining a Bachelors degree in hospitality, he joined MGM as a ticket writer and made his way up to management from there.

Making the odds also isn’t just about predicting a winner. It’s equally about accurately gauging the public perception of who is going to win a match and why. The more evenly distributed the betting is on each side of a match, the more money the casino makes on commissions, which makes media analysis and the collection and interpretation of public opinion data a vital part of oddsmaking.

While this is still within the realm of statistics to some degree, it’s a skill set that requires more than knowing how to run the right numbers. Language skills, psychology and sociology all have a role to play here as well.

Finally, there’s in-depth knowledge of each sport or competition in question. There’s an immense amount of variables that have to be considered in setting a line – injuries, weather, the competitors’ history against each other, the motivation level of potentially an entire roster of players, even the type of turf or grass used in each stadium (and that’s just to name a few). Years if not decades of being an enthusiast of the sport are needed to have a good overall grasp of how to process all these factors.

Sports handicapper jobs in Vegas are few and far between. If it’s something you aspire do, don’t expect to see job listings in the paper or online. Casinos generally promote from within their own ranks. A firm like LVSC likely already has a list of potential recruits ready when a position opens up, but it probably can’t hurt to have a resume on file.

How Do Oddsmakers Make Odds Against

An alternative that’s become popular with the rise of the internet is to start your own subscription-based sports handicapping service, selling your picks (and the reasoning behind them) to customers who pay a monthly fee for your advice. It usually takes a track record of a few seasons of picking at well over a 50% success rate to get people to be willing to pay for your services, but if you have a genuine talent for it, you might get noticed by the big boys.