Some people watch sports to marvel at high-level athleticism. Others enjoy the spirit of competition. For some, it’s all about the artistry and drama. But a sizable chunk of people watch sports because they bet money on the games and want to see if they won. It’s called gambling, and it’s immensely popular. For the uninitiated, the terminology can be a bit confusing, with the confusion serving as a barrier to entry. Not that I’m advocating for developing a gambling habit—this piece is for educational purposes only. With that in mind, here are sports betting basics made super easy. To keep it clean, I’ll focus on the US. (I forget, are there other countries?)
Background
In 2018, the US Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA) of 1992. This federal law had effectively banned betting on most sports in the vast majority of states, with Nevada (home to Las Vegas) being a notable exception.
Since PASPA was declared unconstitutional, states have had the right to roll out their own approach to wagering on sports. At the moment, navigating the gambling laws in individual states can be a source of significant confusion. Not only are the laws evolving rapidly, but they’re loaded with arbitrary restrictions and exceptions.
Regardless, legal sports betting has proliferated, and the amount of money wagered on sports in the US is reaching impressive levels. In the month of October 2020, Americans legally bet approximately $3 billion on sports. This movement of money has translated into significant revenue for many parties involved. By 2025, the annual revenue generated by sports betting is forecast to reach $8 billion.
Basic Bets
While the types of bets that can be placed at a sportsbook (either physical or online) can get pretty complicated, I’ll stick to the entry-level ones.
Moneyline Bets
This is arguably the most straightforward type of bet. You basically pick the team you think will win a game. If the team is favored to win, that will be indicated by a minus sign. For instance, if you pick Team A at -150, you would have to bet $150 to win $100 (or $15 to win $10, $1.50 to win $1.00, etc.). Alternatively, if the team you pick is the underdog (i.e. not favored to win), that will be indicated by a plus sign. If you pick Team B at +150, you would win $150 on a $100 bet (or $15 on a $10 bet, $1.50 on a $1.00 bet, etc.).
Spread Bets
In this type of bet, the margin of victory is incorporated. If you pick Team A minus 3, this means that Team A must win by 4 or more points for you to win the bet. If they win by 2 points or less (or lose), you lose the bet. If they win by 3 points, it’s a push, and you get your money back. If you pick Team B plus 3, this means they must lose by 2 points or less (or win) for you to win the bet. Typically, these bets pay out at -110 (a bet of $110 will earn $100).
Over/Under Bets
This type of bet incorporates the total score of a game. If the over/under is 46, and you take the over, the sum of the score of both teams must be 47 or greater (27-20 would work). If you bet the under, the sum of the score of both teams must be 45 or less (24-21 would work). Such bets also typically pay out at -110.
Prop (Proposition) Bets
These bets focus on events within a game as opposed to the outcome of the game. Examples include betting on which team will score first, how many points a certain player will have, etc. The payouts depend on the odds of the given event actually occurring.
Parlays
A parlay bet combines two or more wagers into one bet. In other words, all the individual wagers must go your way in order to win the parlay. If even one of the wagers loses, the entire parlay loses. Because the odds of winning a parlay are lower, the payouts can be higher.
Teasers
Teasers are quite similar to parlays, though with teasers, you can actually move point spreads and over/unders by a prespecified amount of points. Given that this movement can increase the odds of winning, the payouts are lower relative to parlays.
The Business Model
If you’re wondering how sportsbooks make money, here’s an oversimplified explanation. The goal for the sportsbook is to have an equal amount of money on both sides of a bet. If Team A is favored to beat Team B, the spread is set such that half the total wagered money (we’ll say $110) is for Team A, and the other half ($110) is for Team B. If Team A wins, you might think that the sportsbook owes that group of bettors their initial $110 plus another $110, leaving the sportsbook with nothing. However, since the payout is set to -110, a bet of $110 results in a payment of only $100. The other $10 stays with the sportsbook. Obviously, in real life, the dollar amounts are much larger, and the concept is spread out over a far greater number of bets.
With these sports betting basics in hand, you’ll be able to navigate a few extra conversations. If so desired, you’ll even be equipped to engage in some small-scale gambling. Don’t worry. It’s perfectly legal. Maybe.
