Beat The Spread

Everybody likes to cheer for the underdog, but hardly anyone bets on the underdog to win. We tend to put our money on the favorite most of the time. In fact, we bet on the favorite far more frequently than we should. To understand why, you have to understand some of the basic functions and malfunctions of human decision-making.

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Filling out a winning March Madness bracket is difficult, but the process itself is simple. All you have to do is pick a winner for each game in your bracket. Most of the time, sports betting is more complicated than that. It’s easy enough to pick the favorite to win, but what if we were to say the favorite has to win by at least eight points? And what if that eight-point spread were carefully crafted to make the game a toss-up — who would you pick then? This is the type of decision sports bettors have to make all the time.

In 2004, University of Chicago economist Steven Levitt identified the fact that point spreads aren’t set like typical market prices, by equating relative levels of supply and demand. Instead, bookmakers set the margin to make the chance of the favorite covering the spread to be roughly 50 percent. Levitt speculated that bookmakers substantially improve their profits by biasing the spread very slightly against the favorite. This approach is profitable for bookmakers in part because, despite facing virtually even odds, people are much more likely to bet on the favorite than the underdog.

The question that Levitt’s research left unaddressed is why people show such a strong bias towards favorites. As digital editor of the Society for Personality and Social Psychology, I come across many studies, and I found a compelling answer to this question in the research of Joseph Simmons, associate professor at the University of Pennsylvania’s Wharton School, and Leif Nelson, associate professor at the Haas School of Business at the University of California, Berkeley. Simmons and Nelson say that people’s confidence in their own intuitions — regardless of whether that confidence is justified — guides their decision-making.

“When people decide how to bet on a game, first they identify who is going to win,” Nelson said. That decision is often fast and easy, particularly when teams are not evenly matched. “The faster and easier it is, the less concerned they are with correcting that intuition when answering the more difficult question of whether the favorite is going to beat the point spread.”

For all but the most experienced bettor, determining whether the favorite will beat the spread is incredibly challenging. Keeping in mind that the spread is carefully calibrated to make the choice a virtual coin flip, people simply don’t have much to go on besides their intuition. And because their intuition strongly suggests that the favorite will win, in the absence of information to the contrary it also tells them that the favorite will beat the spread. In a game between two fairly evenly matched teams, people’s feelings of confidence in the favorite to win are diminished, and they’re much less likely to pick the favorite to cover the spread.

Simmons and Nelson analyzed betting data on 1,008 regular season NFL games on Sportsbook.com from 2009 to 2012. They found the average share of money bet on the favorite was 65 percent. This confirmed their initial study in which they tracked data from thousands of predictions of 850 professional and college football games on Yahoo.com for the 2003 and 2004 seasons. There Simmons and Nelson found, just as Levitt did, that even though favorites were about 50 percent likely to beat the spread (413 favorites beat the spread, 415 did not, and 22 were ties), people bet on the favorite more than two-thirds of the time. In fact, the more people believed a certain team would win, the more likely they were to also choose that team to beat the spread. Put another way, the confidence bettors felt in picking the winner translated into an unrelated belief that the winner would beat the spread.

Simmons and Nelson also ran a series of studies in a controlled laboratory setting. They made sure that people knew exactly what it meant to bet the spread. In addition to asking people who they thought would win the game and how confident they were in their choice, the researchers asked them to estimate the margin of victory. Remarkably, people continued to overwhelmingly bet that the favorite would cover the same spread they had just personally estimated. And, once again, the more confident people felt that a team would win, the more likely they were to bet that the team would beat the spread.

Astute gamblers may have noticed that although the bias towards favorites is a persistent one, it doesn’t appear to cost people very much. If the point spread is calibrated to give favorites a 50 percent chance of beating it, then even if people bet on the favorite every time, they should win half their bets, just as they would if they always bet on the underdog or chose at random. In another paper, however, Simmons and Nelson, along with Jeff Galak of Carnegie Mellon University and Shane Frederick of Yale University, found that favoritism towards favorites persists even when the playing field is tilted in favor of the underdog. People continued to show a bias toward picking favorites to cover the spread even when points were added to the spread dropping the favorites’ odds below 50 percent. Even explicitly telling people that the spread was artificially inflated didn’t stop them from making the costly error.

Luckily, as you scramble to fill out your March Madness bracket, you don’t have to pick against spreads. You just have to pick who will win each game, something your intuition is pretty good at doing. So, in this case, go right ahead: Follow your gut and pick the favorites.

Point spread betting is the most popular form of sports betting. The vast majority of sports wagers use a point spread thanks to the popularity of football and basketball. Even though this type of betting is so popular, it may take awhile to understand.

The point spread is sometimes known as an equalizer for sportsbook operators. All teams aren’t created equally, so sportsbooks can create a point spread for a game so that each team playing has an almost even chance of winning the game. In a way, the point spread will even the field for both teams.

The point spread gives a reason for bettors to risk money on both teams. The better team playing in the game is considered favorite. They have to win by the point spread offered by the sportsbook. The favorite in a game is listed as being minus (-) the point spread.

The worse of the teams playing in the game is called the underdog. The bettor wins if this team wins the game outright or loses by an amount smaller than the point spread. The underdog in a game is listed as being plus (+) the point spread.

Let’s use this past Super Bowl between the Tampa Bay Buccaneers and Kansas City Chiefs as an example.

Using this example, the Chiefs were 3-point favorites over the Buccaneers. The Chiefs needed to win by 4 or more points to cover the spread.

Likewise, the Buccaneers were 3-point underdogs. That means the Buccaneers needed to win the game outright or not lose the contest by 4 points or more. At Chiefs -3, if they won by exactly 3 points, the betting result would have been a “push” and bettors for both sides would have gotten their wagers refunded.

Beat The Spread Meaning

The Buccaneers pulled off the upset, winning by a score of 31-9, and rewarded bettors who backed them at +3.

Point spread betting odds

Point spreads are usually set with -110 odds, but pricing often fluctuates at online sportsbooks. This is the sportsbook operators’ house edge. The odds guarantee the sportsbook operator will see a little money over time. When the odds are set at -110, the bettor must wager $110 to win $100 (or $11 to win $10).

The odds on a point spread are most commonly known as the vigorish or “vig” for the sportsbook. You might hear this small profit margin for the sportsbook called the “juice” by some sports bettors.

Point spread FAQs

What does ‘pick em’ or ‘pick’ mean in NFL betting?

A “pick em” (sometimes seen as “pick”) is when the teams have a point spread of zero, meaning neither team is favored. In this instance, you’re essentially picking moneyline and your bet will be determined on the winner alone.

What does -7 and +7 mean in NFL betting?

The Spread Nfl

A spread of minus-seven (-7) means that a is favored to win the game by a touchdown (technically, a touchdown and the extra point). A team favored by -7 must win the game by eight or more points to win the bet. If the team wins by seven, the result is a “push” and the bet is refunded.

A spread of +7 means the team must win the game or lose by fewer than seven points to win the bet. A loss by seven would result in a push.

What does -3 and +3 mean in NFL betting?

A -3 spread means that the favorite must win by more than a field goal to win the wager. A three-point win would result in a push and the sportsbook would refund the wager.

Beat The Spread Definition

A spread of +3 means the team listed as the underdog must win the game or lose by fewer than three points to cash the bet. A three-point loss would be graded as a push by the sportsbook and the bet would be refunded.

Why are point spreads in the NFL so much lower than in college?

In 2019, the Baltimore Ravens led the NFL in point differential per game at +13.7 points; the Miami Dolphins ranked last in the NFL in point differential per game at -11.7. Even Kansas City– known for their explosive offense– had an average point differential in 2019 of just 9.7 points. The net point differential in the NFL is -14.1, or -0.9 points per game. Basically, the talent differential in the NFL is so minute that even mismatched teams often draw games within a score of each other.

NFL spreads are most commonly between one point and four, with six being a heavy favorite and extremes coming out around 15-20 point favors. (For those wondering, the 1941 Chicago Bears hold the NFL record of point differential at +15.7 points per game. Conversely, Ohio State had a +33.1 average point differential in 2019.)

Point spread and odds movement

Sportsbook operators often aim to have equal money on both sides of a point spread. When the money is exactly split the sportsbook operator will see the exact vigorish as their profit margin. If all things are equal over time this will maximize how much money the sportsbook operator can make.

In an effort to have equal money on both sides of a wager, the sportsbook operator will move the point spread to attract money on the side that customers aren’t betting on. The odds for a point spread might change before the actual point spread. There are certain point spread numbers, like 3 and 7 in football, the sportsbook operators would like to avoid moving away from since the final score margin falls on these two numbers most often.

For example, if a lot more money is wagered on the New England Patriots -3, the vig may shift from -112 to -115 and -120 before the line moves to -3.5.

Run and puck lines

Betting Spread Tip

Football and basketball games are mostly bet using a point spread. The less popular major sports, baseball and hockey, are mostly bet using a moneyline. In an effort to make baseball and hockey more appealing to point spread bettors, the sportsbook operators offer run and puck lines, respectively.

Beat The Spread Nfl

These alternative lines give point spread bettors a chance to wager on other sports using a more familiar method of betting. Since points (runs and goals) aren’t as easy to come by in baseball and hockey, the odds with the lines may have a wider spread than a football or basketball game.