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Gambling

How Sportsbooks Make Odds

The sportsbook is the entity that takes bets on various sporting events. The legal sports betting industry has grown rapidly in recent years. In 2018, it brought in $4 billion worth of wagers. The growth is largely due to a May 2018 Supreme Court ruling that struck down 1992 federal legislation banning states from offering sports wagering. While the growth is a positive for the sportsbook industry, it has also introduced new complications. For example, same-game parlays are now offered by most online sportsbooks. In the past, if one of the legs in a parlay lost, the entire bet was void. Now, the sportsbooks only void the entire bet if one of the legs loses, leaving the other leg with the higher payout to collect the profit.

Unlike other casino gambling establishments, which take bets and then give the money back to the players, sportsbooks take a cut of each bet made at their sportsbook. This is known as the vigorish, and it’s the primary source of revenue for many sportsbooks. The goal of the sportsbook is to balance the action on both sides of a game, allowing it to collect its vig and offer bettors a fair chance at winning their bets.

A sportsbook’s oddsmaking process for a given NFL game begins almost two weeks before kickoff. On Tuesday, a few select sportsbooks release so-called look ahead lines for the week’s games. These are known as 12-day numbers, and they’re based on the opinions of a few smart sportsbook managers. The opening limits on these lines are typically a thousand bucks or so, which is a large amount of money for most casual punters but far less than what a professional sports bettor would risk on a single pro football game.

As the week progresses, betting limits on these 12-day lines progressively increase. Sharp bettors pounce on the early lines and force sportsbooks to move their odds in response. This occurs especially when a line is adjusted in the wake of injury news or significant performance data. By late Sunday night or Monday morning, the betting limits are usually close to their full amounts, and the action is mainly coming from sharp bettors.

When the betting public leans heavily toward popular teams and heavy favorites, sportsbooks will “shade” the lines to attract more action on the underdog side of a game. This is often done by making Joe Public pay more to take the heavy favorite, which makes the sportsbook’s long-term profits grow.

Sportsbooks also shade lines in a variety of other ways, including by adjusting the prices of certain bets and offering special promotions to certain types of customers. This is commonly referred to as “line shopping.” A key component of this practice is the use of professional pick sellers, who are often called touts. Despite the popularity of this strategy, some experts caution against it. They cite the danger of recency bias, which is the tendency to place too much importance on recent results.