Point Spread

If you’ve ever seen a guy pulling his hair out over a (seemingly) inconsequential scoring play in the dying seconds of the 4th quarter…he was probably betting the spread.

Spread betting is commonly used to wager on high scoring sports like American football and basketball to create parity between teams. The point spread, or “spread”, refers to the number of points that the favorite has to win the game by in order to win the bet.

To bettors unfamiliar with American football (or basketball), seeing lines with a point spread can be confusing. Add in the fact that these sports often use American odds, and the line can resemble a complex math problem.

Dallas +4.5 (110) @ Green Bay -4.5 (-110).

Fortunately, it’s not. When compared to fixed odds betting, the point spread actually makes it easier for the casual bettor to calculate payouts, as everything is usually just under even money.

WHAT IS THE POINT SPREAD?

The point spread was invented by Charles K. McNeil in the 1940’s. Formerly a math teacher and securities analyst, McNeil was a successful gambler who developed his own system for predicting NFL scores, and used this to his advantage.

When one of Chicago’s largest sportsbooks limited McNeil’s action, he went into business for himself, and brought the concept of spread betting with him. At the time, horse racing, boxing and baseball were the big money makers for American bookies, but the point spread changed all of that.

In its simplest terms, the point spread involves wagering not on the outcome of the game, but on the margin of victory. In the Dallas @ Green Bay example above, the Packers need to win the game by 5+ points to pay out, while the Cowboys pay out with anything better than a 4-point loss.

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PAYOUTS & LINE MOVEMENT

The point spread exists in order to have each side of the bet on relatively even footing, with action coming on either side. Typically, this involves both teams paying out at -110.

Dallas +4.5 (-110)

Green Bay -4.5 (-110)

This indicates that, in both cases, an $11 bet wins $10, with the bookmaker taking $1.

With spread betting, the sportsbooks want equal money on both sides, in order to guarantee profit (they are, ironically, not big on gambling). Often, this will require them to adjust the payouts, or the spread.

For example, if there is more action on the Green Bay side, the bookmakers might sweeten the pot for Dallas to coax bettors to that side:

Dallas +4.5 (+100)

Green Bay -4.5 (-120)

With these new odds, a Dallas win pays out even money, while it now costs $12 to win $10 betting on Green Bay.

If money continues to go to Green Bay, then we might see this:

Dallas +5 (-120)

Green Bay -5 (+100)

At +100, Green Bay now pays out at even money, but must win by 6 points to do so, as a 5-point margin of victory is a push, and a 5.5-point win is impossible.

TEASING THE LINE

With point spread betting, payouts are usually just below even money, but can occasionally be even money or slightly above even money. Thus, the +300 underdogs or -250 favorites that are common in moneyline wagers (as well as fixed odds sports like soccer, baseball and hockey) don’t exist.

If bettors want to improve their payout, they can tease the line and adjust the spread to their liking. For example, let’s say we believe Green Bay will crush Dallas by more than a touchdown – we can change the line, and our odds, to improve the payout:

Green Bay -7 (+200)

With this new line, we can now double our stake if Green Bay wins by more than a touchdown. If we think Dallas will keep things close, we can do the opposite:

Dallas +3.5 (+220)

With this wager, $10 wins $22, as long as Dallas keeps the score within a field goal.

DETERMINING THE NFL POINT SPREAD

The general idea behind setting the point spread is easy enough to understand, as the better team has to give up points to an inferior opponent. That said, there are a number of factors at play. Oddsmakers can’t simply parse through the standings to determine the spread based on a team’s past performance.

Injuries, hot streaks and specific matchups all play a part, as does home field advantage. In NFL football, home field advantage is typically worth 3 points. If our example game was played in Dallas it might look like this:

Green Bay -1.5

Dallas +1.5

The Packers are still favored, but now only have to win by 2 to pay out.