The Nevada sportsbook industry is now a $2-billion a year business.

It has taken a giant step from just 9 hole-in-the-wall operations in 1974 to over 105 locations today. The complexity of oddsmaking has grown to meet the demands of the rapidly changing business.

There are three pieces to the sports betting pie: oddsmakers, bookmakers and gamblers. Formerly, bookmakers and oddsmakers were synonymous. However, today’s bookmaker is responsible for many different business decisions. He is likely to be involved in marketing strategies, negotiating simulcast contracts, purchasing the latest satellite equipment, and directing as many as 100 employees. Today’s bookmaker often looks to outside odds consultants for help in posting his line.

At Las Vegas Sports Consultants, we currently advise legal bookmakers in over 35 Nevada casinos, as well as clients in Australia, England, Ireland, Mexico and Canada. Understanding odds and their function is a requirement for anyone engaged in this business.

The Function of the Line

The line, or odds, is the key to running a successful sportsbook. The primary function of the line is to balance action. Linemakers are not concerned with splitting the opinions of all sports fans or even all sports bettors. Their concern is to attract equal amounts of money on each side of an event.

Suppose the Giants are a 2-point favorite over the Saints and there are 101 bettors interested in the game. 100 of those like the Giants at -2 for 455 to win $50. The last bettor likes the saints at +2 for $5,500 to win $5,000. The line certainly didn’t split the opinions of the 1-1 bettors. However, it did split the money. Which is the most any oddsmaker or bookmaker can ask.

The Basis of the Line

The foundation of the line is the opinions of the bettors who create the majority of action. The linemaker predicts how these bettors will react to widely available information and arrives at a line. The sophistication of the clientele that bets a sport will determine how the linemaker interprets the information. In the NFL, long standing reputations of teams is a large consideration because the majority of the action comes from people who do little statistical analysis.

The general factors that linemakers consider are talent, situational analysis, and public perception. Situational analysis is the study of special circumstances that affect team performance. For example, a widely followed situation in professional sports is to bet against the baseball literally hundreds of these situations that get attention, regardless of their profitability. In college sports, talent and public perception take precedence. Professional sports rely more on situational analysis.

The role of feedback in linemaking is remarkable. When the bettors vote with their dollars, they are either betting with a team or against a team. It becomes clear after a few games which teams the bettors favor, and which teams are in their disfavor.
The analysis is more complicated in professional sports than college due to the larger role of situational analysis. However, given time, public biases can usually be incorporated in the linemaking process, the opening numbers won’t be too far off.
Sometimes, linemakers react slowly to trends. As a result, linemakers are mistakenly cited for poor vision. Rather, the situation merely confirms the feedback plays a large role in the linemaking process. Bettors fail to play on recent evets consistently, and linemakers respond accordingly. Were bettors to react trends more strongley.

Today’s computer databases have radically changed the ability of oddsmakers to be able to understand trend analysis. Formerly, records were kept in loose-leaf notebooks and checking a simple trend about how a team performed after playing a fifth game in seven nights would have been a tedious affair consuming many hours. Now, computer programs retrieve the needed data in seconds.

Creating odds is a balance between art and science. Computerized programs help develop power ratings for all sports teams. Yet, subjective analysis is still a large part of the linemaking process, due to the volatility in the sports handicapping field.