How MoneyLines Are Made

The concept behind moneylines is a little bit different than it is with point spreads. The goal of the point spread it to attract an equal number of money on each team, so that the sportsbook is guaranteed a profit regardless of which team cover the point spread. But the primary goal of moneylines, from a sportsbook’s point of view, is to make the underdog attractive to bettors in order to entice enough bets on the “dog” to cover those placed on the favorite.

In our previous article on moneylines, we used a boxing match that had:

Terry Flanagan -1100

Derry Mathews +700

If the sportsbook received $22,000 on Flanagan and $2,000 on Mathews, they had done their job, as they would lose nothing if Flanagan won as expected or make $8,000 if Mathews pulled off the stunning upset.

But suppose the odds on the fight were:

Terry Flanagan -550

Derry Mathews +350

Now, those betting on Flanagan are risking $550 to win $100, while those taking Mathews are risking $100 to win $350. If the sportsbook receives the same $22,000 on Flanagan and $2,000 on Mathews, it would have to pay out $4,000 to those with winning bets, while collecting only $2,000 in losing bets on Mathews, so the sportsbook is down $2,000 for the fight.

If Mathews wins, the sportsbook stands to make $22,000 from the losing Flanagan bettors and only have to pay out $7,000 to winning bettors, giving it a profit of $15,000 for the fight. Much better, except that sportsbooks aren’t in business to gamble. They’d much rather take the guaranteed break-even match, with the opportunity to show a nice profit if the underdog wins, than take a $2,000 loss with the chance to make a bigger profit if the underdog wins.

Just like with the point spread, moneyline odds also change in relation to the amount of money wagered on the favorite or the underdog. If too many bets are coming in on the favorite, the odds on the favorite will be raised in hopes of attracting more wagers on the underdogs, as well as to slow down the tide of wagers on the favorite.

It’s the same in reverse; if the underdog is attracting a high number of wagers, the odds may be dropped in order to try to generate more bets on the favorite, as well as slow down the tide of people betting on the underdog.

Related Topics:

How is the Point Spread Made?

What are Money Line Bets?