How do bookies make money on sports betting?
Like everybody else, bookmakers in Vegas know the Broncos are great and the Jaguars are awful. They don’t know what the final score will be. But they don’t have to predict the future to make money.
In fact, Christopher Avery, a Harvard economist who published a widely-cited study about the NFL betting line, says the spread doesn’t reflect exactly how bookmakers expect the game to turn out.
“The people who are setting the point spread are not trying to get the point spread right, in the sense of it’s the best guess about how the game will turn out,” he says. “They’re trying to make money. So what they want to do is, they want to balance the betting on both sides.”
Meaning, they want to set the line so that half the people will take Denver, half Jacksonville. That way, they pay off the winners with money they got from the losers, and collect their commission.
“You know, that never really happens,” says Jay Rood, and he should know. He sets the line for MGM’s Vegas hotels. (He guesses Las Vegas casinos will see 3 to 4 million in bets on this game alone.)
“We always have an imbalance in the wagering,” says Rood. “So we’re always having to root for a certain side. And we’ll be rooting for Jacksonville, I guarantee it, this weekend.”
Because even a huge point spread won’t be enough to chase away a whole lot of bets on the Broncos.
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