Oddsmakers Know Suckers When They See Them–Setting The Line
Here is what every Oddsmaker wants you to believe. They want you to believe that every line for every game is set simply based on the general public’s perception of the most likely outcome of those games. So, the entire public betting world perceives that when the Washington Wizards travel to Los Angeles to play the Lakers, the Lakers will most likely win that game at home by 10 points. Easy enough. So based on this theory, the opening line for this game should be set at -10 for the home team.
But a sucker is born every day. And that sucker sees that the line for this game opens at -5.5 and bets the house on the Lakers. In fact, most of the betting public bets the Lakers, to the tune of 90%. The other 10% bet the Wizards at +5.5. What could they possibly be thinking?
Final score? Lakers 111 Wizards 109. And it took a three pointer at the buzzer to win it. So much for public perception. The betting line is almost NEVER set on public perception. Yet, every oddsmaker interviewed on the planet tells you that public perception is the factor they use when setting the line. This is precisely how they preserve their investment and guarantee their profit. This is also why 98% of bettors lose in the long run–their perception of setting the line is misguided.
For the vast majority of games, the lines are set based on mathematical probabilities and statistical analysis of historical public betting patterns. Public perception is the key factor in only a minimal amount of games. The bookmakers job is to maximize profit–just like any corporation. In order to maximize profit, the oddsmaker looks at the most probable outcome of every game from a mathematical standpoint and, if necessary, takes into consideration public perception only if it will result in a bigger payout for the book.
If I knew the mathematical probability for the outcome of that Lakers Wizards matchup was going to result in a 2 or 3 point victory for the Lakers was 99.9% and the general public thinks this is an easy double digit win for the Lakers, I’ll be setting the line at somewhere in the middle.
What wouldn’t I set the line at exactly -2 or -3? Because this is too obvious. 100% of all the money bet on this game would end up on one side of this game. Being a savvy linesmaker, I need to have just enough action on the other side of this game to have it look like an anomaly. People get discouraged and stop betting on sports when they are beaten by what looks too much like a sucker bet. By keeping bettors losing, but also keeping them betting, I maximize my profit and guarantee future action.