Spread betting

The general purpose of spread betting is to create an active market for the two sides of a binary bet, even if the results of an event might seem prima facie to be biased towards one side or another. In a sporting event a powerful team may be matched against a historically weaker team; virtually every match has a favorite and an underdog. If the wager is simply“Will the win?“ , more bets are very likely to be made for the preferred, possibly to this extent that there would be very few betters willing to take the underdog.

The point spread is essentially a handicap towards the underdog. The wager becomes“Will the preferred win by more than the point spread?“ The point spread can be transferred to any amount to make an equivalent number of participants on all sides of the wager. This allows a bookmaker to act as a market maker by accepting wagers on each side of the spread. The bookmaker charges a commission, or vigorish, and functions as the counterparty for every player. Provided that the entire amount wagered on each side is approximately equivalent, the bookmaker is unconcerned with the actual outcome; gains instead come in the commissions.

Since the spread is intended to make an equal quantity of wagers on either side, the implied probability is 50% for both sides of the wager. To gain, the bookmaker must pay one side (or both sides) significantly less than this notional amount. In practice, spreads could possibly be perceived as slightly favoring one side, and bookmakers often reevaluate their odds to handle their event risk.

One important assumption is that to be credited with a win, possibly team just needs to win from the minimum of these rules of the sport, without respect to the margin of victory. This suggests that teams at a winning position won’t necessarily attempt to expand their perimeter –and more to the point, each team is only playing to win instead of simply to beat the point spread. This assumption does not necessarily hold in most situations. For example, at the conclusion of a season, the overall points scored by a team can affect future events such as playoff seeding and placement for your amateur draft, and teams can“run up“ the score in cases like this. In virtually all sports, players and also other gambling contributors are forbidden from becoming involved in sports gambling and thus have no incentive to take into account the point spread during play; any effort to manipulate the results of a game for gambling purposes could be considered match fixing, and the punishment is typically a lifetime banishment from the sport, such is the lack of tolerance for gambling in game.

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