How does sports betting work? A guide for beginners

Sports betting has rapidly expanded globally, particularly since the legalization of sports gambling in the US in May 2018. Despite its popularity, there remain aspects of sports betting that aren't fully grasped by participants, casual fans, or even experienced bettors known as "sharps."

Understanding your chances of winning and interpreting betting odds are fundamental to every bettor's approach. However, many lack confidence and authority when discussing sports betting. Can you differentiate between American and decimal odds and understand their potential profit implications?

A popular adage in gambling states that while good teams win, great ones cover the spread. Distinguishing between these scenarios and predicting outcomes is crucial. Let's delve into how sports betting operates and how you can leverage this knowledge to your advantage.

What constitutes sports betting?

Sports betting involves staking money on the potential outcome of a sports event, ranging from simple predictions like the winning team to more complex scenarios like the margin of victory. It requires one party to set the odds and accept bets, while another commits money to place the wager. Once placed, bets remain locked until the event concludes, at which point winnings are allocated based on the outcome. Sportsbooks typically charge a small fee, known as "juice" or "vigorish," deducted from the wagered amount. Understanding these terms aids in calculating winning probabilities and expected value for bets.

Varieties of odds in sports betting

You'll often find sportsbooks providing a selection of odds formats via a dropdown menu. The primary types are Decimal, American, and Fractional odds. While they all represent the same event probabilities, they're displayed differently. We'll briefly outline each type using an example featuring the Utah Jazz versus the Memphis Grizzlies.

Fractional Odds

Utah Jazz: 2/9
Memphis Grizzlies: 17/5

Expressed as fractions, these odds are straightforward. The numerator (left side) indicates potential winnings, while the denominator (right side) represents the amount to bet. Thus, for every $9 wagered on the Utah Jazz, you could win $2, and for every $5 bet on the Memphis Grizzlies, you could win $17.

Although the figures may vary across odds formats, the underlying probability remains unchanged. Calculating odds probability will be discussed separately.

American Odds

Utah Jazz: -435
Memphis Grizzlies: +340

In American odds, the figure indicates how much you need to bet to win $100. Though the baseline is winning $100, the displayed amount isn't obligatory, as the formula is adjustable.

Once again, the Utah Jazz are favored with a significant probability of winning. To earn a $100 profit on this selection, you'd have to risk $435.

While this might seem complex at first, sportsbooks handle the calculations for you, providing estimates of potential winnings based on your bet amount.

Decimal Odds

Utah Jazz: 1.23
Memphis Grizzlies: 4.40

Decimal odds offer a simpler alternative for those unfamiliar with moneyline odds. For every $1 wagered, you'd anticipate a return of $1.23 for the Utah Jazz and $4.40 for the Memphis Grizzlies. It's important to note that the figure represents the total payout, not just the profit.

Remember to factor in the sportsbook fee, and keep in mind that you'll need to subtract your initial bet amount as well.

Varieties of betting options

In today's fiercely competitive sportsbook industry, a plethora of betting options exists. Knowing which bets fulfill specific purposes can enhance your chances of securing a favorable payout. From straightforward point spread bets to various alternatives, there are numerous avenues to profit from sports betting.

Lines and probabilities fluctuate, yet comprehending the fundamental types enables better preparation, potentially transforming even modest investments into substantial gains. With this objective, let's explore several primary types of bets.

Point spreads

Recall our earlier mention of "covering the spread"? Here's what it means: the spread represents an amount added or subtracted from the final score to determine the outcome of the bet, irrespective of the game's winner. Consider this example directly from a sportsbook:

Philadelphia 76ers -8 (-110)
Washington Wizards +8 (-110)

To place a bet, you'd wager $110 on either team. For the 76ers, you're betting they'll win by more than 8 points. Conversely, if the Wizards lose by fewer than 8 points or win outright, they secure a winning outcome for your bet.

Props, teasers, and pleasers 

Proposition bets, or props, are unique wagers based on specific conditions defined by each operator. These can include predicting player points mid-game or NFL quarterback rushing yards, offering a multitude of possibilities.

Teasers, suitable for advanced bettors, are similar to parlays but allow adjustments to point spreads and over/under totals by 4 to 10 points. This alteration affects odds and potential payouts.

Pleasers, also advanced bets, provide better odds and potential payouts by slightly favoring the sportsbook's chance of winning. While complex, they offer higher potential returns.

It's crucial to note that various other bet types exist, including sports-specific options. Starting with basics like moneyline bets and gradually exploring others is advisable.

Moneyline or straight bets

Moneyline bets, also known as straight bets, entail wagering on a team to win a game, with the terms used interchangeably. Moneylines typically utilize American odds, indicated by -/+ 100 or another three-digit number. Consider this example extracted directly from a sportsbook:

Philadelphia 76ers (-360)
Washington Wizards (+285)

The minus (-) signifies the favorite, while the plus (+) denotes the underdog. For instance, to win $100 on the 76ers, you'd need to bet $360 due to their high likelihood of success. Conversely, a $100 bet on the Wizards could yield $285 in winnings since their chances of winning are lower. Moneyline or straight bets are among the most common types, particularly recommended for newcomers to betting.

Parlays

Parlays, also known as accumulators outside the United States, involve selecting multiple games or matches for a single bet. While the risk is higher, so is the potential reward. If all your chosen events are successful, parlay bets can significantly boost your winnings.

This type of bet is considered more advanced, requiring a deeper understanding of the industry and sports involved. While the potential payout is greater, it's important to recognize the increased risk associated with parlays.

Futures

Futures, also known as outright winners, are bets typically placed well in advance of a competition. For instance, you might wager on the Super Bowl winner before the NFL season begins, or predict the champion of March Madness, the PGA Tour, or any other event.

Each sportsbook presents a list of potential candidates, with odds varying slightly between operators. It's wise to explore different markets and odds to find the most favorable options.

For example, if you're considering betting on the Kansas City Chiefs to win the Super Bowl, rather than settling for the first sportsbook you encounter, it's beneficial to compare betting lines offered on futures.

Payouts are issued at the conclusion of the event, contingent upon your selection emerging victorious.

Totals or Under/Over

Totals, also known as under/over bets, deviate from traditional wagering on a team's outright victory. Instead, these bets revolve around predicting whether the total points scored in a game will surpass or fall below a predetermined figure. The sportsbook establishes this number along with associated odds, allowing you to assess whether the wager is worthwhile.

Where to place sports bets?

Sports betting is a widely available activity across most countries globally. However, each jurisdiction determines the permissibility of viable sports wagering options. While some places, like the United States, are more receptive to hosting sports betting contests, others, such as China, maintain a cautious stance toward the activity.

Despite differing regulations, sports betting remains immensely popular and is likely to continue as such. It's crucial to prioritize reputable sportsbooks and operators, whether online or in retail establishments, ensuring your bets are with trusted and licensed entities.

Selecting a sportsbook may initially seem daunting, but numerous licensed operators can be explored, tested, and ultimately trusted. It's advisable to compare odds across multiple sportsbooks and engage with at least several providers simultaneously to maximize your betting experience.

How live sports betting functions

One dynamic sector that has experienced rapid growth, particularly with the legalization of sports betting in the United States, is the in-play or live betting market. Even if you're new to sports betting, you've likely heard about this segment and may soon find yourself intrigued by it.

Live betting, as the name implies, allows you to place bets during a live game, in real-time. For many sports enthusiasts, this offers another way to engage with their favorite teams, players, or events, whether it's football, basketball, golf, or MMA.

During live betting, selections adjust continuously to reflect the sportsbook's assessment of the most probable outcomes. Engaging in this type of betting demands focus, quick decision-making, and a deep understanding of the participating teams or individuals.

While live betting is entertaining, it involves higher-risk wagering, necessitating vigilance in decision-making. One advantageous feature of live betting markets is the ability to "cash out" a wager early, allowing you to minimize potential losses or secure profits before a market settles.