How Does Sports Betting Work?

How Does Sports Betting Work?

Understanding how sports betting works is key to becoming successful as a bettor. But how do you not get overwhelmed by all the sports betting terms you need to understand? What are the different types of bets and the different sports that you can bet on?

This article explains how each type of bet works, including reading the odds and calculating payouts. We list the different sports you can bet on, where and how you can place your bets, and how much to bet.

Understanding Sports Betting: How Does It Work?

Sports betting is a way for some sports fans to make money while combining their sports knowledge and betting skills.

For others, sports betting makes watching a sporting event more fun than if they didn’t have a stake in the outcome. This is probably why millions of people enjoy wagering on sporting events every year.

The fundamentals of how betting works are quite straightforward.

At least two parties (bookmakers or oddsmakers and bettors) bet on whether or not something will happen. Sportsbooks present betting odds per game, and bettors place their wagers.

The party that gives the correct prediction regarding the outcome of a sporting event wins the bet. That party receives a payout, depending on the bet type and amount wagered.

Whoever gives the wrong prediction loses the bet and must pay out accordingly.

Understanding Odds in Sports Betting

Bettors can place different types of bets on several sporting events involving different sports.

For every game or matchup, bookies (bookmakers) display odds in various formats on the betting lines.

Odds can tell you which bets are worth taking. You can use the odds to calculate the implied probability of a specific outcome in a sporting event.

Betting odds also reveal how much a sportsbook is charging to take your sports wager. This cut or commission is referred to as the juice or vigorish (vig).

There are three different odds formats: moneyline or American odds, decimal odds, and fractional odds.

You may encounter each of these formats at some point when betting, so it pays to be familiar with each one. While they work practically in the same way, they’re different ways of expressing the odds for a particular wager.

American Odds

American odds, also called moneyline odds, are the format most commonly used in the United States. They’re shown on the betting lines as either a positive or a negative number.

For example, American odds for an NCAA college basketball game between Duke Blue Devils and Syracuse Orange may look like this.

Duke-750 Favorite

Syracuse +575 Underdog

The odds for favorites have a minus (-) sign, which shows the amount you need to stake to win $100.

The odds for underdogs are affixed with a positive (+) sign, indicating the amount you can win for every $100 you stake.

Given the example above, you have to bet $100 on Syracuse to make a potential win of $575. If Syracuse wins the game, you get back your initial wager of $100, in addition to the $575, giving you a total payout of $675.

Decimal Odds

Decimal odds used to be popular in Australia, Canada, and mainland Europe. Now, they’ve become the standard format at most online sportsbooks, except for some online betting sites in the U.S.

Decimal odds are expressed as a positive number, often with two decimal places. Examples of decimal odds are 1.30, 2.25, and 6.5.

Decimal odds represent the total return for every $1 wagered, including the money you risked.

Meanwhile, an ‘even money’ wager is expressed in decimal odds as 2.00. Even money, also known as a 50–50, is a betting proposition where the bettor can lose or win the same amount of money.

Fractional Odds

Fractional odds are commonly used in the United Kingdom and when betting on horse racing. Sometimes, fractional odds are referred to as British odds or U.K. odds.

An example of fractional odds is 5/1, which you read as “five to one.” With 5/1, you can win five units for every one unit wagered.

If the odds are at 9/4, which is read as “nine to four,” you can win $9 for every $4 staked.

The number (nine) on the numerator indicates how many times the outcome is expected to fail. The number (four) on the denominator tells us how many times the outcome is expected to succeed.

Meanwhile, 1/1 is ‘even money,’ which means you can win $1 for every $1 you bet.

Bet Types: Reading Odds and Calculating Payouts

You’ll see something like this when you check out the odds before betting.

The image shows the betting odds for a particular bet type (spread, moneyline, or totals) for your chosen sport (hockey) and event (NHL game).

1. Moneyline Bets

Betting on the moneyline means you’re picking the winner of the game or sporting event. It’s just either Team A or Team B.

If you think the underdog will win the game straight up, the moneyline is a great bet type to go for.

The odds in the moneyline are adjusted, depending on the team or player's ability. The amount you can win or lose may vary based on the sporting event.

In an NHL (National Hockey League) game between the San Jose Sharks and the Vegas Golden Knights in Las Vegas, Nevada, the odds are:

San Jose Sharks+230

Vegas Golden Knights -286

The moneyline on the underdog Sharks was listed at +230. At +230 odds, a $100 wager would pay $230 in profit if the Sharks won the game. The total payout would be $230 + $100 = $330 (the win amount + initial stake).

Not all sports bets should be $100, though. You can bet as low as $5 per game.

A bet slip is an electronic record of the amount of money you placed on a bet, the odds for those bets, and the estimated return should you win.

2. Point Total Bets

In sports betting, only a few bets are considered regular bets, and the game totals or over/under (O/U) is one of them.

Game totals primarily consider the final score of a sporting event. Bookmakers set a number, and bettors predict whether the final total will go over or stay under the listed number.

For example, in a football game between the Chicago Bears and the Minnesota Vikings, the over/under odds are listed as:

BearsO 35.5 (-110)

Vikings U 35.5 (-105)

In this game, the over/under odds are listed with a half point, which is an impossible outcome. The half point is added to avoid a 'push' (tie), which means the total number of points scored for this game will end up either above or below the O/U odds posted.

3. Point Spread Bets

The point spread is often referred to as an equalizer for oddsmakers. They create a point spread for a game so that each team playing has an almost even chance of winning the game. This way, the point spread can even the playing field for both teams.

It’s common for bets on the point spread to be offered at 11 to 10 odds. This means a player must bet $11 to win $10 and receive a total payout of $21.

Using the Super Bowl between the Tampa Bay Buccaneers and Kansas City Chiefs as an example:

Tampa Bay Buccaneers+3.5 (-110)

Kansas City Chiefs-3.5 (-110)

The Chiefs, the favorite, are at -3.5. This means Kansas City needs to win the game by at least four points in order to ‘cover the spread’ or win on the point spread.

On the flip side of the equation, Tampa Bay is listed as a 3.5-point underdog. To win the bet, the Buccaneers must win outright or not lose by more than 3 points.

4. Parlay Bets

Point spread wagers are sometimes put into parlays in which you make multiple bets on one slip for a potentially huge payoff.

With parlays, you can bet on different sporting events using a variety of bet types. You can bet on moneylines, totals, point spreads, futures, or prop bets, as long as the bets are on different games.

However, note that the house vigorish (your chances of winning) worsens as you add more teams. You may be better off sticking to two-team parlays exclusively, especially if you’re a novice bettor who’s just starting to place parlay wagers.

Note that every "leg" (bet) has to win for the parlay bet to stand. If one leg loses, the parlay bet loses.

5. Teaser Bets

Teasers are parlays that use modified point spreads. Teasers are common in basketball or football betting. The point spread is tweaked by adding points in your favor on more than one game.

The rules for pushes are almost the same across all sports betting sites. If one leg in a teaser pushes while the other legs are a loss, the teaser bet is considered a loss.

Similar to a parlay, each leg of the wager must be a winner for a teaser bet to pay out.

6. Round Robin Bets

With a round robin, you’re creating many different parlays with just one wager. You’re essentially placing every possible parlay combination using the teams in your round robin.

For example, you want to place a $20 round robin on the GB Packers, LA Lakers, and TOR Maple Leafs. That round robin bet would create the following four $5-parlays:

  • A 3-team parlay with the GB Packers + LA Lakers + TOR Maple Leafs
  • A 2-team parlay with the GB Packers + LA Lakers
  • A 2-team parlay with the LA Lakers + TOR Maple Leafs
  • A 2- team parlay with the GB Packers + TOR Maple Leafs

In a standard parlay, all legs should win for you to win the bet. But in a 2-pick round robin, you’ll receive a payout as long as two of the three teams win.

7. Futures Bets

A futures bet is one that’s placed on an event typically far in the future. Sports fans use their ability to predict outcomes by placing wagers on future events, like which player gets the MVP award or who’ll score the first touchdown.

Odds can change dramatically based on player injuries, weather conditions, or change of coaches. Bettors should be quick to note these changes.

For avid sports fans, there’s an added thrill to placing a wager on a longshot (an underdog) early in the offseason and then watching the year play out in their favor.

8. Straight Bets

Straight betting is wagering on a game or event that carries a point spread, moneyline, over/under, run line, or puck line. Straight bets win by covering the point spread or by pushing (becoming a tie).

A straight bet run line in baseball, for example, is a combination of a spread and odds. The spread is always 1½ runs.

Houston Astros -1 ½ (-145)

New York Mets +1 ½ (+130)

If you bet on the Houston Astros, they must win by two runs for you to win your bet. You have to stake $145 to win $100.

A bet on the New York Mets means they can lose the game by one run or win the game. To win $130, you must bet $100.

9. Prop Bets

Proposition or prop bets are often referred to as specials because they come in all shapes and sizes and are offered in various forms for all sports.

Prop bets usually don't directly affect the outcome of a sporting game, although, on some occasions, they do.

There are two distinct categories of prop bets. The first one is called exotic props, done purely for fun without any strategy involved.

Examples of exotic props are:

  • Which soft drink commercial will air first?
  • Who will the MVP thank first?
  • Will the POTUS attend the game?

The other prop bet category is the skilled props, where you can tap on your knowledge of sports and betting skills to make more educated predictions.

What Sports Can You Bet On?

Every sporting event is broken up into various betting markets. Each of these markets focuses on a specific element of the event.

Most bookies offer a wide selection of markets for most high-profile sports events.

Auto Racing

The most basic wager involves choosing who you think will win the race. Sportsbooks usually include 20 or more race car drivers along with other options at various odds.

Baseball

You just pick the team you think will win and place your bet. If that team wins the game, you win your bet. The payout varies according to the odds posted.

For over/under bets, these rules apply:

  1. The game must go 9 or 8 1/2 innings if the home team wins.
  2. Both listed pitchers must start the game.

If either of these conditions isn’t satisfied, the bet is refunded. Also, all runs scored in extra innings count.

Basketball

Bet on basketball find the latest odds on NBA games and futures for different betting options.

Football

A straight bet is most common in football betting, but it’s not uncommon to see football point spreads, parlays, teasers, and futures.

Golf

The most basic form of betting on golf involves choosing the winner of a tournament. Sportsbooks often have about 30 golfers at various odds.

Hockey

You can bet on hockey via the moneyline, point spread, or over/under. You can also combine different teams into one parlay. All teams must win to win the bet.

Boxing

Boxing matches usually include moneyline prop bets on knockouts, draws, rounds, and the fight duration. Boxing odds vary on each fight.

You can find boxing odds under our Boxing/MMA (mixed martial arts) page. Betting on UFC (Ultimate Fighting Championship) matchups is also available.

Horse Racing

Satellite feeds from racetracks around the United States make it possible for horse racing bettors (sometimes called horseplayers) to enjoy betting on this ancient sport. Betting procedures in the racebooks are similar to those at the track.

For you to collect on a ‘win’ bet, the horse you bet on must win the race. To collect on a ‘place’ bet, the horse you bet on must finish first or second place.

If the horse you chose finishes first, second, or third, you can collect on a ‘show’ bet.

More Sports Betting Tips for Beginners

  1. Watch Out for Line Movements

The sports betting market is fluid, and throughout the day, bookmakers adjust the odds depending on the action they’re taking.

News about an incoming typhoon, player injury, and changing of coaches can also impact the odds, making them move. The lines change to balance the action on both sides.

Keeping tabs on these movements will help you decide which bets are worth taking. There are times that lines move far enough to create a ‘middle’ opportunity.

A firm understanding of the different bet types and how they work will help you gain confidence in adjusting your bets to cash in on the opportunity generated by the line movement.

For example, when predicting what happens when Team A meets Team B, the best statistics to analyze the outcome are those generated in their latest head-to-head matchups in the same venue.

  1. Go Shopping for the Best Line

Lines can vary from one sportsbook to another. As a result, one sportsbook’s odds for the same team in the same event may be listed differently in another.

Checking out more than one sportsbook allows you to shop for the best line, and over time, trains you to be discriminating when choosing which sportsbook to go with.

  1. Manage Your Bankroll

The flat-betting approach is a good way to manage your bankroll, the money you set aside for gambling. You bet the same amount per game (one unit), risking only between 1% and 5% of your bankroll per play.

Keeping a record of your past wins and losses will also help you assess your betting progress. Tracking your betting history will also help you examine your strengths and weaknesses as a bettor.

  1. Know When to Stop

Sports betting, particularly online gambling, should be an exciting experience for you, especially if you’re a novice bettor who’s still trying to figure out how the industry operates.