Football Points Spread

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Spread betting is any of various types of wagering on the outcome of an event where the pay-off is based on the accuracy of the wager, rather than a simple 'win or lose' outcome, such as fixed-odds (or money-line) betting or parimutuel betting.

There are three common NFL betting lines: the side, total and moneyline. Side: The side refers to the point spread. While the odds can fluctuate, most sides are -110, meaning you have to bet $110. Point Spread Betting in Football. One of the best ways to beat football point spread betting is to use teasers. A teaser is a form of a parlay bet using modified point spreads. Each point spread you select is moved 6 points in your favor. For example, let’s say you’re interested in betting on the following. Football Point Spreads: How They Work The theory with point spreads is that a wager on either team to win a football game is as close to a 505/50 shot as possible. You’re not actually.

A spread is a range of outcomes and the bet is whether the outcome will be above or below the spread. Spread betting has been a major growth market in the UK in recent years, with the number of gamblers heading towards one million.^[1] Financial spread betting (see below) can carry a high level of risk if there is no 'stop'.^[2] In the UK, spread betting is regulated by the Financial Conduct Authority rather than the Gambling Commission.^[3]

Purpose[edit]

The general purpose of spread betting is to create an active market for both sides of a binary wager, even if the outcome of an event may appear prima facie to be biased towards one side or the other. In a sporting event a strong team may be matched up against a historically weaker team; almost every game has a favorite and an underdog. If the wager is simply 'Will the favorite win?', more bets are likely to be made for the favorite, possibly to such an extent that there would be very few betters willing to take the underdog.

The point spread is essentially a handicap towards the underdog. The wager becomes 'Will the favorite win by more than the point spread?' The point spread can be moved to any level to create an equal number of participants on each side of the wager. This allows a bookmaker to act as a market maker by accepting wagers on both sides of the spread. The bookmaker charges a commission, or vigorish, and acts as the counterparty for each participant. As long as the total amount wagered on each side is roughly equal, the bookmaker is unconcerned with the actual outcome; profits instead come from the commissions.

Because the spread is intended to create an equal number of wagers on either side, the implied probability is 50% for both sides of the wager. To profit, the bookmaker must pay one side (or both sides) less than this notional amount. In practice, spreads may be perceived as slightly favoring one side, and bookmakers often revise their odds to manage their event risk.

One important assumption is that to be credited with a win, either team only needs to win by the minimum of the rules of the game, without regard to the margin of victory. This implies that teams in a winning position will not necessarily try to extend their margin—and more importantly, each team is only playing to win rather than to beat the point spread. This assumption does not necessarily hold in all situations. For example, at the end of a season, the total points scored by a team can affect future events such as playoff seeding and positioning for the amateur draft, and teams may 'run up' the score in such situations. In virtually all sports, players and other on-field contributors are forbidden from being involved in sports betting and thus have no incentive to consider the point spread during play; any attempt to manipulate the outcome of a game for gambling purposes would be considered match fixing, and the penalty is typically a lifetime banishment from the sport; such is the lack of tolerance for manipulating the result of a sporting event for such purposes.

Spreads in sports wagering (U.S.)[edit]

Spread betting was invented by Charles K. McNeil, a mathematics teacher from Connecticut who became a bookmaker in Chicago in the 1940s.^[4] In North America, the gambler usually wagers that the difference between the scores of two teams will be less than or greater than the value specified by the bookmaker, with even money for either option. An example:

The bookmaker advertises a spread of 4 points in a certain game;
- If the gambler bets on the 'underdog', they are said to take the points and will win if the underdog's score plus the spread is greater than the favorite's score.
  - The eventual score is Underdog 8, Favorite 10: 8 + 4 > 10, so the gambler wins;
  - The eventual score is Underdog 8, Favorite 13: 8 + 4 < 13, so the gambler loses.
- If the gambler bets on the 'favorite', they give the points (sometimes called lay the points) and will win if the favorite's score minus the spread is greater than the underdog's score:
  - The eventual score is Underdog 5, Favorite 10: 10 – 4 > 5, so the gambler wins;
  - The eventual score is Underdog 8, Favorite 10: 10 – 4 < 8, so the gambler loses.
- Ties aka 'Push'
  - The eventual score is Underdog 9, Favorite 13: 9 + 4 = 13, so the gambler ties 'pushes'. The reverse is also the same the gambler takes the favorite and it is 13 - 4 = 9

Spreads are frequently, though not always, specified in half-point fractions to eliminate the possibility of a tie, known as a push. In the event of a push, the game is considered no action, and no money is won or lost. However, this is not a desirable outcome for the sports book, as they are forced to refund every bet, and although both the book and its bettors will be even, if the cost of overhead is taken into account, the book has actually lost money by taking bets on the event. Sports books are generally permitted to state 'ties win' or 'ties lose' to avoid the necessity of refunding every bet.

Betting on sporting events has long been the most popular form of spread betting. Whilst most bets the casino offers to players have a built in house edge, betting on the spread offers an opportunity for the astute gambler. When a casino accepts a spread bet, it gives the player the odds of 10 to 11, or -110. That means that for every 11 dollars the player wagers, the player will win 10, slightly lower than an even money bet. If team A is playing team B, the casino is not concerned with who wins the game; they are only concerned with taking an equal amount of money of both sides. For example, if one player takes team A and the other takes team B and each wager $110 to win $100, it doesn't matter what team wins; the casino makes money. They take $100 of the $110 from the losing bet and pay the winner, keeping the extra $10 for themselves. This is the house edge. The goal of the casino is to set a line that encourages an equal amount of action on both sides, thereby guaranteeing a profit. This also explains how money can be made by the astute gambler. If casinos set lines to encourage an equal amount of money on both sides, it sets them based on the public perception of the team, not necessarily the real strength of the teams. Many things can affect public perception, which moves the line away from what the real line should be. This gap between the Vegas line, the real line, and differences between other sports books betting lines and spreads is where value can be found.

A teaser is a bet that alters the spread in the gambler's favor by a predetermined margin – in American football the teaser margin is often six points. For example, if the line is 3.5 points and bettors want to place a teaser bet on the underdog, they take 9.5 points instead; a teaser bet on the favorite would mean that the gambler takes 2.5 points instead of having to give the 3.5. In return for the additional points, the payout if the gambler wins is less than even money, or the gambler must wager on more than one event and both events must win. In this way it is very similar to a parlay. At some establishments, the 'reverse teaser' also exists, which alters the spread against the gambler, who gets paid at more than evens if the bet wins.

Sports spread betting[edit]

In the United Kingdom, sports spread betting became popular in the late 1980s by offering an alternative form of sports wagering to traditional fixed odds, or fixed-risk, betting. With fixed odds betting, a gambler places a fixed-risk stake on stated fractional or decimal odds on the outcome of a sporting event that would give a known return for that outcome occurring or a known loss if that outcome doesn't occur (the initial stake). With sports spread betting, gamblers are instead betting on whether a specified outcome in a sports event will end up being above or below a ‘spread’ offered by a sports spread betting firm, with profits or losses determined by how much above or below the spread the final outcome finishes at.

The spread on offer will refer to the betting firm's prediction on the range of a final outcome for a particular occurrence in a sports event, e.g., the total number of goals to be scored in a football (US: soccer) match, the number of runs to be scored by a team in a cricket match or the number of lengths between the winner and second-placed finisher in a horse race.

The gambler can elect to ‘buy’ or ‘sell’ on the spread depending on whether they think the final outcome will be higher than the top end of the spread on offer, or lower than the bottom end of the spread. The more right the gambler is then the more they will win, but the more wrong they are then the more they can lose.

The level of the gambler's profit or loss will be determined by the stake size selected for the bet, multiplied by the number of unit points above or below the gambler's bet level. This reflects the fundamental difference between sports spread betting and fixed odds sports betting in that both the level of winnings and level of losses are not fixed and can end up being many multiples of the original stake size selected.

For example, in a cricket match a sports spread betting firm may list the spread of a team's predicted runs at 340 – 350. The gambler can elect to ‘buy’ at 350 if they think the team will score more than 350 runs in total, or sell at 340 if they think the team will score less than 340. If the gambler elects to buy at 350 and the team scores 400 runs in total, the gambler will have won 50 unit points multiplied by their initial stake. But if the team only scores 300 runs then the gambler will have lost 50 unit points multiplied by their initial stake.

It is important to note the difference between spreads in sports wagering in the U.S. and sports spread betting in the UK. In the U.S. betting on the spread is effectively still a fixed risk bet on a line offered by the bookmaker with a known return if the gambler correctly bets with either the underdog or the favourite on the line offered and a known loss if the gambler incorrectly bets on the line. In the UK betting above or below the spread does not have a known final profit or loss, with these figures determined by the number of unit points the level of the final outcome ends up being either above or below the spread, multiplied by the stake chosen by the gambler.

For UK spread betting firms, any final outcome that finishes in the middle of the spread will result in profits from both sides of the book as both buyers and sellers will have ended up making unit point losses. So in the example above, if the cricket team ended up scoring 345 runs both buyers at 350 and sellers at 340 would have ended up with losses of five unit points multiplied by their stake.

Bets on the total (over/under)[edit]

In addition to the spread bet, a very common 'side bet' on an event is the total (commonly called the over/under or O/U) bet. This is a bet on the total number of points scored by both teams. Suppose team A is playing team B and the total is set at 44.5 points. If the final score is team A 24, team B 17, the total is 41 and bettors who took the under will win. If the final score is team A 30, team B 31, the total is 61 and bettors who took the over will win. The total is popular because it allows gamblers to bet on their overall perception of the game (e.g., a high-scoring offensive show or a defensive battle) without needing to pick the actual winner.

In the UK, these bets are sometimes called spread bets, but rather than a simple win/loss, the bet pays more or less depending on how far from the spread the final result is.

Example: In a football match the bookmaker believes that 12 or 13 corners will occur, thus the spread is set at 12–13.

A gambler believes that there will be more than 13 corners, and 'buys' at £25 a point at 13.
- If the number of corners is 16, the gambler wins (16–13) = 3 x £25.
- If the number of corners is 10, the gambler loses (13–10) = 3 x £25.
A 'sell' transaction is similar except that it is made against the bottom value of the spread.
Often 'live pricing' changes the spread during the course of an event, increasing a profit or minimizing a loss.

In North American sports betting many of these wagers would be classified as over-under (or, more commonly today, total) bets rather than spread bets. However, these are for one side or another of a total only, and do not increase the amount won or lost as the actual moves away from the bookmaker's prediction. Instead, over-under or total bets are handled much like point-spread bets on a team, with the usual 10/11 (4.55%) commission applied. Many Nevada sports books allow these bets in parlays, just like team point spread bets. This makes it possible to bet, for instance, team A and the over, and be paid if both

team A 'covers' the point spread (wins by that amount or more)

and

the total score is higher than the book's prediction.

(Such parlays usually pay off at odds of 13:5 with no commission charge, just as a standard two-team parlay would.)

Mathematics[edit]

The mathematical analysis of spreads and spread betting is a large and growing subject. For example, sports that have simple 1-point scoring systems (e.g.,baseball, hockey, and soccer) may be analysed using Poisson and Skellam statistics.

Financial spread betting[edit]

By far the largest part of the official market in the UK concerns financial instruments; the leading spread-betting companies make most of their revenues from financial markets, their sports operations being much less significant. Financial spread betting in the United Kingdom closely resembles the futures and options markets, the major differences being

the 'charge' occurs through a wider bid-offer spread;
spread betting has a different tax regime compared with securities and futures exchanges (see below);
spread betting is more flexible since it is not limited to exchange hours or definitions, can create new instruments relatively easily (e.g. individual stock futures), and may have guaranteed stop losses (see below); and
the trading is off-exchange, with the contract existing directly between the market-making company and the client, rather than exchange-cleared, and is thus subject to a lower level of regulation.

Financial spread betting is a way to speculate on financial markets in the same way as trading a number of derivatives. In particular, the financial derivative Contract for difference (CFD) mirrors the spread bet in many ways. In fact, a number of financial derivative trading companies offer both financial spread bets and CFDs in parallel using the same trading platform.

Unlike fixed-odds betting, the amount won or lost can be unlimited as there is no single stake to limit any loss. However, it is usually possible to negotiate limits with the bookmaker:

A stop loss or stop automatically closes the bet if the spread moves against the gambler by a specified amount.
A stop win, limit or take profit closes the bet when the spread moves in a gambler's favor by a specified amount.

Spread betting has moved outside the ambit of sport and financial markets (that is, those dealing solely with share, bonds and derivatives), to cover a wide range of markets, such as house prices.^[5] By paying attention to the external factors, such as weather and time of day, those who are betting using a point spread can be better prepared when it comes to obtaining a favorable outcome. Additionally, by avoiding the favourite-longshot bias, where the expected returns on bets placed at shorter odds exceed that of bets placed at the longer odds, and not betting with one's favorite team, but rather with the team that has been shown to be better when playing in a specific weather condition and time of day, the possibility of arriving at a positive outcome is increased.

Tax treatment[edit]

In the UK and some other European countries the profit from spread betting is free from tax. The tax authorities of these countries designate financial spread betting as gambling and not investing, meaning it is free from capital gains tax and stamp duty, despite the fact that it is regulated as a financial product by the Financial Conduct Authority in the UK. Most traders are also not liable for income tax unless they rely solely on their profits from financial spread betting to support themselves. The popularity of financial spread betting in the UK and some other European countries, compared to trading other speculative financial instruments such as CFDs and futures is partly due to this tax advantage. However, this also means any losses cannot be offset against future earnings for tax calculations.

Conversely, in most other countries financial spread betting income is considered taxable. For example, the Australian Tax Office issued a decision in March 2010 saying 'Yes, the gains from financial spread betting are assessable income under section 6-5 or section 15-15 of the ITAA 1997'.^[6] Similarly, any losses on the spread betting contracts are deductible. This has resulted in a much lower interest in financial spread betting in those countries.

Financial spread bet example[edit]

Suppose Lloyds Bank is trading on the market at 410p bid, and 411p offer. A spread-betting company is also offering 410-411p. We use cash bets with no definite expiry, or 'rolling daily bets' as they are referred to by the spread betting companies.

If I think the share price is going to go up, I might bet £10 a point (i.e., £10 per penny the shares moves) at 411p. We use the offer price since I am 'buying' the share (betting on its increase). Note that my total loss (if Lloyds Bank went to 0p) could be up to £4110, so this is as risky as buying 1000 of the shares normally.

If a bet goes overnight, the bettor is charged a financing cost (or receives it, if the bettor is shorting the stock). This might be set at LIBOR + a certain percentage, usually around 2-3%.

Thus, in the example, if Lloyds Bank are trading at 411p, then for every day I keep the bet open I am charged [taking finance cost to be 7%] ((411p x 10) * 7% / 365 ) = £0.78821 (or 78.8p)

On top of this, the bettor needs an amount as collateral in the spread-betting account to cover potential losses. Usually this is either 5 or 10% of the total exposure you are taking on but can go up to 100% on illiquid stocks. In this case £4110 * 0.1 or 0.05 = £411.00 or £205.50

If at the end of the bet Lloyds Bank traded at 400-401p, I need to cover that £4110 – £400*10 (£4000) = £110 difference by putting extra deposit (or collateral) into the account.

The punter usually receives all dividends and other corporate adjustments in the financing charge each night. For example, suppose Lloyds Bank goes ex-dividend with dividend of 23.5p. The bettor receives that amount. The exact amount received varies depending on the rules and policies of the spread betting company, and the taxes that are normally charged in the home tax country of the shares.

Terminology and acronyms[edit]

HoD: High of day (the highest price the market traded at for the day).
Intraday trader: A trader operating from within each day's trade times.
LoD: Low of day (the lowest price the market traded at for the day).
London Turn: The time when markets subtly change direction between 12:15 and 13:15 GMT with a regularity that is more than coincidental.
Market session: The time of day that is governed mostly by the regional stock markets. Times vary from broker to broker, but the following are typical: Asian session (22:30 to 08:45 GMT), European session (06:45 to 16:45 GMT), US session (13:00 to 21:30 GMT).
Spread: The difference between the ask and bid prices, which may vary between markets and between brokers substantially.

Dangers of financial spread betting[edit]

According to an article in The Times dated 10 April 2009, approximately 30,000 spread bet accounts were opened in the previous year, and that the largest study of gambling in the UK on behalf of the Gambling Commission found that serious problems developed in almost 15% of spread betters compared to 1% of other gambling.^[7] A report from Cass Business School found that only 1 in 5 gamblers ends up a winner.^[8] As noted in the report, this corresponds to the same ratio of successful gamblers in regular trading.^[9] Evidence from spread betting firms themselves actually put this closer to being 1 in 10 traders as being profitable.^{[citation needed]}

Notes[edit]

^The Sunday Times: 'World Cup to kick off boom in spread betting'
^'The perils of spread-betting'. The Times. Sep 20, 2007. Archived from the original on July 19, 2008.
^'Gambling Commission - Home'. www.gamblingcommission.gov.uk.
^Gambling Times: What are the Odds?Archived 2011-02-04 at the Wayback Machine
^The Sunday Times: Spread betting
^'Income Tax – Assessable income derivation of income – spread betting'. Australian Government ATO. 3 March 2010. Retrieved 26 January 2011.
^Budworth, David. 'Spread-betting fails investors in trouble'. thetimes.co.uk. Retrieved 11 October 2013.
^Pfanner, Eric. 'Spread-bets on Cup venture into bizarre - Technology - International Herald Tribune'. The New York Times. Retrieved 11 October 2013.
^Rayman, Richard. 'White Paper on Spread Betting'(PDF). Cass Business School. Retrieved 11 October 2013.

Simple Tips for Point Spread Betting

Betting Lines College Football

Strategy for betting point spreads is obviously different for each sport and league, but these four tips are general enough to apply to them all.

Take Advantage of Bonus Offers
Use Multiple Betting Sites
Be Careful of Road Favorites
Understand Key Numbers

Let’s go over each of these tips in a little more detail.

Take Advantage of Bonus Offers

One way to make money from sports betting is to open an account at an online betting site and take advantage of their sign up bonus. This gives you extra money to wager with, and since point spreads are so straightforward, it can be relatively easy to meet the associated wagering requirements and still come out ahead. Repeating this process at multiple betting sites will maximize your potential returns! We just ask that you please stick with reputable sites, like any of the ones that we recommend.

Use Multiple Betting Sites

We already mentioned how using multiple betting sites allows you to take advantage of multiple bonus offers. That’s not the only benefit either. Since point spreads vary between sites, one of the best ways to beat these wagers is to compare the different spreads in order to find which one is the most favorable. This doesn’t take nearly as long as you might think, and it will make a huge difference to your bottom line over time.

Let’s take a hypothetical game between the Buffalo Bills and the New England Patriots as an example. One site might have the spread as follows.

Point Spread

-7

Another site might offer a slightly different spread.

Point Spread

+7.5

-7.5

If you’re betting in favor of the Patriots, then you should be betting with Bookmaker A. If the Patriots win by more than seven points, then you’ll win with either bookmaker. However, if they win by exactly seven points, you’ll lose with Bookmaker B. With Bookmaker A, you’ll push and get your stake returned.

On the other hand, if you’re betting on the Bills, then Bookmaker B will be your best option. A Bills loss of exactly seven points would be a push at Bookmaker A, but it would be a win for you at Bookmaker B.

It’s only a half-point difference, and that might not seem like a lot. The bookmakers tend to be very accurate with their spreads though, and an extra half-point in your favor can easily add up to extra profits over time.

Be Careful of Road Favorites

Many novice bettors fail to understand the impact of home advantage when wagering on sport events. When looking at the board for potential wagers, these bettors tend to get excited and bet on lots of superior teams favored on the road against weaker opponents. The betting market is so much more advanced than this, and for the most part point spreads are always going to be 50/50 propositions.

Please Note

We’re not saying that you should never bet on road favorites. Just make sure that you have good reasons to do so. Keep in mind; they don’t just need to win, they need to win by a greater margin than the spread suggests they will.

Understand Key Numbers

While understanding key numbers is beneficial for betting point spreads on any sport, key numbers are known for having the most significance in football. In NFL football, most games are decided by three or seven points. Therefore, when shopping the odds, the difference between -7.0 and -6.5 is far greater than the difference between -5.5 and -5.0.

With some betting sites odds, certain games are priced differently than risking $1.10 to win $1.00 (which is called -110 odds). For example, you might see the Giants priced at -105 and +7 in a game against the Jets. Now, you only have to risk $1.05 to win $1.00. This is obviously better odds, but it’s very likely that they will lose by exactly seven to give you a push. Taking -110 and +7.5 with an alternative bookmaker is actually the better bet.

Getting your head around these kind of intricacies, as well as knowing the relevant key numbers, is vital if you want to bet on the point spreads successfully.

Now that we’ve got the basic tips covered, we want to provide you with some point spread betting tips specific to two of the most popular US sports: football and basketball.

Point Spread Betting in Football

One of the best ways to beat football point spread betting is to use teasers. A teaser is a form of a parlay bet using modified point spreads. Each point spread you select is moved 6 points in your favor. For example, let’s say you’re interested in betting on the following.

-7

-3.5

A teaser would give you a single wager with the following spreads.

+3.5

+13

Each selection is obviously easier to get right with the spread moved in your favor, but you do have to get all three correct in order for your wager to win.

Point Spread Betting in Basketball

Buying half points is a strategy that can work for basketball too. Most online betting sites offer bettors the ability to purchase half-points at 10 cents each. Let’s say the Lakers are -6.5 at odds of -110 for example. Here of some of the options you can expect to see.

-120

-130

-140

A great strategy for betting basketball point spreads is to shop dozens of betting sites for the best line, and then purchase as many half points as possible (provided they are priced 10 cents each).

When using this strategy, it’s helpful to know the most common margins of victory in NBA basketball and how often they occur.

This information shows us that nearly half the games finish with one of the eight point margins listed, and this isn’t the result of variance. Some margins of victory occur more frequently than others because of end game strategy. The winning team is often found running the clock, while the losing team if often found intentionally fouling.

The key here is to target the point spread five and seven, because these are virtually tied as the most common margins of victory. It’s important to recognize that most betting sites are only willing to sell 2 or 3 half points for 10 cents each, after which point they start charging more. Some sites sell up to four half points at this price though.

To show how this can be exploited, take a point spread of -8.5 at odds of -110. This is a 50/50 proposition. Let’s assume you’ve purchased enough points to move the spread to -6.5 at odds of -150. Now, you’d win instead of lose 6.24% of the time they win by 8, and 6.59% of the time they win by 7. Add these together with the 50% from the original proposition, and we get 62.83%.

Go to our odds converter, and you’ll see that the implied probability of -150 is 60%. This means you need to win 60% of the time to break even. However, our handicapping shows the actual probability of winning is 62.38%.

If we risked $150 to win $100 on this -150 line, 62.38% of the time we would win $100. And 37.62% of the time we would lose $150. This gives us an expected profit of $5.95 for every $150 risked.

Warning

If you only make large +EV bets such as the basketball example above, betting sites will limit the amount you’re allowed to wager. It’s not uncommon for online bookmakers to spot a skilled bettor and say, “Okay you can keep wagering here, but the maximum you’re allowed to bet per game is $500.00.”
If you keep betting and winning, they might decrease your limits even further. That’s why we recommend trying to hide the fact that you’re so sharp. By placing some random wagers and occasionally spending some time at their casino, you’ll have a much better chance of staying under the radar.
This is also another good reason for using multiple sites. Since there are so many different reputable betting sites to choose from, it would take you a long time to get limited at every single one of them.

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