How Does a Sportsbook Get Its Edge?
A sportsbook is a place where people can place bets on sporting events and outcomes. These bets can include individual team or player bets, or multiples such as trebles and accumulators. Sportsbooks also take a commission on bets placed, and offer bonuses and incentives for players to place their bets with them. Sportsbooks can be found online and at traditional brick-and-mortar locations.
Understanding how a sportsbook gets its edge can help you be a savvier bettor and recognize potentially mispriced lines. In addition, it can help you understand what type of bets are most profitable for the book and how to make the best use of available promotions such as boosted and bonus bets.
Each Tuesday, a handful of sportsbooks release the so-called look-ahead lines for next week’s games. These are 12-day lines that open betting 12 days before the next Sunday’s kickoffs, and they are typically based on the opinion of a few smart sportsbook managers. They are not influenced by sharps, and betting limits are often low – much lower than what a professional would risk on a single game.
To estimate the magnitude of the sportsbook bias, we define the expected profit on a unit bet on the visiting team as phh and the probability of winning the home game by the margin of victory as phv. We then compare these values to the empirically measured CDF of the median margin of victory. Each bar in Fig 4 represents the hypothetical expected profit on a unit bet when the spread is offset by 1, 2, and 3 points from the true median.
