I Found this article in the Links and have the pertinent parts in here. Go to the Link to read all of it. Its important information on our quest to find the best edge to winning wagers.
Issue #22 ? Balancing Action: Why the line moves
Last week, I discussed some of the factors involved in betting on preseason football. One portion of that column featured an interview with BoDog?s top bookmaker Kent where I quoted him as saying ?we just follow the money and try a lot harder to balance action? in reference to moving lines on preseason games. This week I want to explain line moves from the House?s point-of-view in more detail. Much of this comes from a similar article I wrote last football season, but I think it is important enough for bettors to understand how a sportsbook operates that I will publish it every year!
Remember that sportsbooks make their money by withholding a small commission on winning wagers.
First, in the real world, action is very rarely perfectly balanced and sportsbooks almost always have a vested interest in the outcome of every game. When action isn?t balanced, and the outcome of an event could lead to a loss for the house, the sportsbook is exposed. Each sportsbook determines how exposed it can be on any given event. It is a combination of this tolerance for risk and the sportsbook?s wagering action that drives line changes. If a sportsbook has $5,500 wagered by its clients on Atlanta ?4 and $2,200 wagered on Buffalo +4, then the sportsbook stands to lose $2,800 if Atlanta covers (collects $2,200 from players who bet on Buffalo but has to pay $5,000 to players who bet on Atlanta) but stands to win $3,500 if Buffalo covers (collects $5,500 from players who bet on Atlanta but has to pay $2,000 to players who bet on Buffalo). This may not seem like much risk, but if you multiple these numbers by 10, 20, 50, 1000 or more, you can appreciate why sportsbooks move lines to balance action. One sportsbook might move to ?4.5 when it is exposed by $5,000 on Atlanta where another sportsbook might be comfortable at ?4 until it is $250,000 offside. It depends on the anticipated total handle, the game, the sport and the book?s tolerance for risk.
Some sportsbooks handicap the games themselves and may shade the line a half point or more in a direction to generate more wagering on the team they think will not cover.
you may be thinking: ?why don?t sportsbooks just keep moving the line until they are balanced?? The reason sportsbooks don?t balance action at any cost is because there is also a risk involved every time a line is moved.
When the final score lands on one of the outer extremes of the range of pointspreads for a game the house is said to have been sided.
when it lands between the outer extremes of the range of pointspreads for a game the house is said to have been middled.
It is the risk of getting sided or middled that keep books from moving lines, and it is the risk of having a position on a losing team that force them to move the line. Books that move lines too far can suffer heavy losses with a bad outcome, as will books that don?t move lines enough. The difficulty in knowing when to move lines is what makes bookmaking an art and not a science.
At the start of last season I asked Kent, BoDog?s head bookmaker, what level of risk he is comfortable with. ?At BoDog, we don?t like to gamble? even though we?re in the gambling business. To minimize risk for ourselves and for our players, we take reasonable measures to balance action by making calculated line moves. We don?t move lines recklessly to balance at any cost because of the risks of sides and middles. Our players will occasionally find value in the lines but can be comfortable knowing we aren?t risking the house on any game.? This week I asked him if there were any changes in his strategy. ?No, we have had success in the last year and even with the heavy growth we?ve experienced, we will be sticking to the same basic philosophy? the numbers are just a little bigger?.
Every book moves lines a little differently and so every day there are differences in the lines between books for the exact same game. I will talk about the opportunities presented to sports bettors as a result of these differences in next week?s column on shopping lines. I will come back to the topic of balancing action in two weeks when I discuss key numbers (spreads of 3 and 7 in football).
Rob Gillespie
Operations Manager
We got to understand this stuff to win.
Scott-Atlanta
Issue #22 ? Balancing Action: Why the line moves
Last week, I discussed some of the factors involved in betting on preseason football. One portion of that column featured an interview with BoDog?s top bookmaker Kent where I quoted him as saying ?we just follow the money and try a lot harder to balance action? in reference to moving lines on preseason games. This week I want to explain line moves from the House?s point-of-view in more detail. Much of this comes from a similar article I wrote last football season, but I think it is important enough for bettors to understand how a sportsbook operates that I will publish it every year!
Remember that sportsbooks make their money by withholding a small commission on winning wagers.
First, in the real world, action is very rarely perfectly balanced and sportsbooks almost always have a vested interest in the outcome of every game. When action isn?t balanced, and the outcome of an event could lead to a loss for the house, the sportsbook is exposed. Each sportsbook determines how exposed it can be on any given event. It is a combination of this tolerance for risk and the sportsbook?s wagering action that drives line changes. If a sportsbook has $5,500 wagered by its clients on Atlanta ?4 and $2,200 wagered on Buffalo +4, then the sportsbook stands to lose $2,800 if Atlanta covers (collects $2,200 from players who bet on Buffalo but has to pay $5,000 to players who bet on Atlanta) but stands to win $3,500 if Buffalo covers (collects $5,500 from players who bet on Atlanta but has to pay $2,000 to players who bet on Buffalo). This may not seem like much risk, but if you multiple these numbers by 10, 20, 50, 1000 or more, you can appreciate why sportsbooks move lines to balance action. One sportsbook might move to ?4.5 when it is exposed by $5,000 on Atlanta where another sportsbook might be comfortable at ?4 until it is $250,000 offside. It depends on the anticipated total handle, the game, the sport and the book?s tolerance for risk.
Some sportsbooks handicap the games themselves and may shade the line a half point or more in a direction to generate more wagering on the team they think will not cover.
you may be thinking: ?why don?t sportsbooks just keep moving the line until they are balanced?? The reason sportsbooks don?t balance action at any cost is because there is also a risk involved every time a line is moved.
When the final score lands on one of the outer extremes of the range of pointspreads for a game the house is said to have been sided.
when it lands between the outer extremes of the range of pointspreads for a game the house is said to have been middled.
It is the risk of getting sided or middled that keep books from moving lines, and it is the risk of having a position on a losing team that force them to move the line. Books that move lines too far can suffer heavy losses with a bad outcome, as will books that don?t move lines enough. The difficulty in knowing when to move lines is what makes bookmaking an art and not a science.
At the start of last season I asked Kent, BoDog?s head bookmaker, what level of risk he is comfortable with. ?At BoDog, we don?t like to gamble? even though we?re in the gambling business. To minimize risk for ourselves and for our players, we take reasonable measures to balance action by making calculated line moves. We don?t move lines recklessly to balance at any cost because of the risks of sides and middles. Our players will occasionally find value in the lines but can be comfortable knowing we aren?t risking the house on any game.? This week I asked him if there were any changes in his strategy. ?No, we have had success in the last year and even with the heavy growth we?ve experienced, we will be sticking to the same basic philosophy? the numbers are just a little bigger?.
Every book moves lines a little differently and so every day there are differences in the lines between books for the exact same game. I will talk about the opportunities presented to sports bettors as a result of these differences in next week?s column on shopping lines. I will come back to the topic of balancing action in two weeks when I discuss key numbers (spreads of 3 and 7 in football).
Rob Gillespie
Operations Manager
We got to understand this stuff to win.
Scott-Atlanta
