To start the 2007 NCAA college football season, perennial powerhouse Michigan squared off against Appalachian State, who played in the FCS division ― a step below the division where blue bloods like Michigan, Ohio State and Penn State play.
Michigan was at home in The Big House, its massive 100,000-person stadium where losses occurred less frequently than presidential elections. Appalachian State was a 33-point underdog in the game.
In a stunning upset, Appalachian State took a 34-32 lead late in the 4th quarter and blocked the potential game-winning Michigan field goal on the last play of the day. At the time, Appalachian State was one of the longest underdogs to ever win a game outright ,and you can still annoy Michigan fans to this day by bringing it up.
So how did Appalachian State come to be a 33-point underdog? Because across the country, sports books set point spreads based on a variety of environmental and team-specific factors. In this particular game, the oddsmakers thought Michigan was 33 points better than Appalachian State. Needless to say, they don’t always get it right.
What are Spreads?
In investing, a spread is the difference between the price a seller is willing to accept for an asset and the price the buyer is willing to pay for that asset. The spread is collected by the market maker for facilitating the deal.
But in investing, individual shares of a specific company are pretty much all equal, except in certain circumstances. When it comes to sports betting, the 2 teams competing are almost never equal, so a spread is required to entice betting action on both sides.
The spread is simply the amount of points oddsmakers favor one team over another in a particular game. When crafting a spread, the oddsmakers will look at factors like skill of the individual teams, location of the game being played and weather forecasts for outdoor sports like football.
A point spread also varies depending on the sport being played. For example, football spreads are usually much wider than baseball spreads since you get 6 points for a touchdown in football but only 1 point for a run in baseball.
How to Read Spreads
If you aren’t familiar with point spreads, you might be confused at first glance. A point spread will involve 3 figures: the favorite, the underdog and the juice or vig.
Step 1: Identify the Favorite
Unless the 2 teams are evenly matched, every sporting event will have a favorite and an underdog. The team that’s expected to win the game is the favorite. One of the reasons the spread exists is because teams aren’t evenly matched and just picking winners and losers is easy.
Imagine how much money a sportsbook would lose if the 15-1 Kansas City Chiefs played the 2-14 New York Jets without a spread and payouts were equal on both sides. Everyone would bet the far superior Chiefs, right?
So instead, oddsmakers set a spread of 14.5 points in an attempt to entice equal betting action on both sides. This is the crucial job of an oddsmaker: listing a spread that will garner as close to 50% of the bets on each side as possible.
The odds would read as follows: Chiefs -14.5 (-110) vs Jets +14.5 (-110). More on the numbers in parenthesis in Step 3.
Step 2: Identify the Underdog
The underdog is the team NOT expected to win the game. But betting on underdogs can still be a profitable venture if they lose the game by fewer points than the listed spread.
In the example above, the Chiefs were a 14.5 point favorite over the Jets. If the Chiefs win the game 28-14, the Jets will have ‘covered the spread’. They lost by fewer points than the oddsmakers projected and a bet on the Jets +14.5 is a winner.
Step 3: Calculate the Vig
How does the sportsbook make money if they want to entice equal betting action on both sides? The same way a casino does — they employ a rake. In sports betting, this is referred to as vig or juice and it actually functions similar to a spread in a stock trade.
Let’s use our Chiefs vs Jets example from the previous paragraph. Remember the (-110) figure after the spread? This is the vig, and it’s how much you’ll need to bet in order to win $100.
Most books will set the vig at -110 or -115, which means you must bet $110 or $115 in order to win $100. In order to be a profitable sports betting, you must hit over 52% of your bets in order to beat the vig. A common misperception is that a bettor who hits at a 50% clip breaks even. Due to the vig, hitting 50% of your bets would produce a negative ROI and the only one profiting is the book.
Here’s how a point spread will look at most American sportsbooks:
- KC Chiefs -14.5 (-110) vs NY Jets +14.5 (-110)
If you want to bet the Chiefs point spread, they will need to win by 15 points or more, and you’ll win $100 on a $110 bet. If the Chiefs only win by 14 points, you lose the full $110.
What are the Odds for a Point Spread?
The point spread enables bettors to place a near-even money bet on a game, but it’s not the only way to wager on a sporting event. If you want to just pick winners and losers, you can bet what’s called the moneyline. A moneyline bet is a straight win or loss wager. If you bet the favorite and they win, you collect regardless of the score.
Of course, betting on favorites is expensive. Oddsmakers create moneyline odds based on the likelihood of the favorite winning the game. You’ll often see odds listed as fractions (ie. 5/2), but American sports books tend to list them in the same format as the point spread vig.
The Chiefs were a 14.5 point favorite in our previous example, which means oddsmakers give them about a 95% chance of winning (or 1/20). If you wanted to bet on a Chiefs win by any margin, you’d have to bet the moneyline at 1/20 odds. That means wagering $20 for every $1 of potential profit. In order to win $100, you’d have to wager $2,000.
Yes, the Chiefs likely win, but betting $2,000 to win $100 is awfully risky for a single sporting event, especially when you consider player injury risk.
Results of a Point Spread Bet
Betting on a point spreads has 3 potential outcomes:
- Win: The team you bet on wins by more than the listed point spread. You get paid out your winnings plus the original capital you bet.
- Loss: The team you bet on loses or fails to cover the point spread. You lose the entirety of your bet.
- Push: If you bet on a team to win by 7 points and they win by exactly 7, it’s listed as a push, which means tie. You’ll get your original wager back but no profit.
Point Spread: NFL vs NBA
The spread is the spread regardless of sport. If an NBA team is favored by 14.5, they must win by 15 or more to cover the spread. NBA and NFL are 2 of the most popular sports to bet because scoring is frequent and less random than the NHL or MLB.
The difference comes from how these spreads are calculated. In the NFL, 3 factors go into the spread: talent level of the teams, location of venue, and weather forecast for the game. For the NBA, the schedule is unbalanced and games are played indoors.
NBA point spreads use the following factors: talent level of teams, location of venue, and schedule discrepancies between teams. For example, a team with a day of rest will get a more favorable points spread if they play a team who competed the night before. Since NFL games are usually played a week apart, schedule doesn’t play as large a role in determining the spread.
Benzinga’s Recommended Sportsbook Platforms
Sports betting is opening up across the country, but legality is on a state-by-state basis and not all sportsbooks are available in each state.
Here’s a list of our favorite sportsbooks. Be sure the one you choose is available in your state:
Points Spreads are Easy to Comprehend
Sports betting is a simple endeavor to participate in, but impossible to master. A point spread is a simple concept that enables bettors to get close to even money action on whichever side they choose. It also gives the sportsbook the ability to smooth their liability out to close to a 50/50 proposition.
If 50% of bettors choose 1 team and 50% choose the opponent, the book is guaranteed to profit thanks to the vig. Understanding these concepts can help gamblers minimize losses and increase profits.
People Also Ask
Why are point spreads in the NFL so much lower than in college?
In the NFL, there are 32 teams. In college football, there are well over 100 in the top division alone. Since more teams are present, the talent level between the top and bottom teams is greater so point spreads in college are often higher.
In the NFL, team talent levels are more closely aligned, even when the best team plays the worst team.
What does a +7 spread mean?
A +7 spread means that the team in question is expected to lose by 7 points. If you bet a team with a +7 spread, they must win or lose by 6 or fewer in order for the bet to cash. Likewise, a team with a -7 spread must win by 8 or more to make a profit.
What does ‘pick em’ or ‘pick’ mean in NFL betting?
Sometimes, the 2 teams playing are evenly matched after factoring in talent level, venue, and weather forecast. When this happens, the game will be listed as a ‘pick’, which is essentially the oddsmakers saying, “We don’t know”.
A pick ‘em or pick is a toss-up or coinflip. If you bet $100 on either side, you’ll win $100 if they win minus the vig.
About Dan Schmidt
Dan has written about a wide range of topics including stocks and investing, cryptocurrencies, banking, student loans, and credit cards.