How to Win at a Sportsbook

A sportsbook is a business that accepts bets on sporting events and pays out winning bettors. Some sportsbooks are located in physical venues, while others are purely online and accessible with a few clicks of the mouse or taps on the phone. Regardless of the type of wager, bettors must understand how sportsbooks set odds and price bets to maximize their profits.

A common bet is on a team to win the Super Bowl. This bet has a low win probability, but it can yield a large payout, because the bet is paid out in multiples of the amount wagered. As such, it’s a popular bet for sportsbooks to take.

Sportsbooks strive to balance bettors on either side of a game by offering centered odds, which reflect the true expected probability of each event occurring. Oddsmakers set prices using a variety of sources, including computer algorithms and power rankings.

The goal of a bettor is to predict the median outcome. A statistical analysis of the distribution of outcomes shows that the median is a random variable with a normal distribution, and that knowledge of this characteristic is sufficient to achieve optimal wagering. The paper also derives upper and lower bounds on the accuracy of wagering, and applies this theory to real-world NFL betting data. It is found that sportsbook point spreads and totals capture 86% and 79% of the variability in the median outcome, respectively.