Wouldn't life be easier if we could just bet straight on games? Sure it would, but it wouldn't make life easier for the online sportsbooks. The point spread on games is in essence a survival tool for bookmakers. The point spread is designed to balance the books, so to speak, of the wagering on a game. By putting a handicap of requiring to win by a certain amount of points on the favorite, and giving the benefit of extra points to the underdog, it encourages more people to wager on the latter.
Spreading The Points in Sports Betting
If there was no point spread, the money would be very lopsided and sportsbooks could take a real financial bath on some games. That's why you will notice that during the course of the time leading up to a game, the line may move. Sportsbooks adjust the point spread when there is significant action on one side of the ledger in an upcoming game.
How It Began
The point spread was born from the brilliance of a mathematical mind. Long before there were analytics experts discussing the merits of sabermetrics and Corsi, there was Charles T. McNeil. McNeil was a prep school math teacher in Connecticut in the mid-1920s, but he opted to give up that glamorous lifestyle in exchange for the mundane existence as a professional sports gambler. And along the way, he also invented the point spread.
McNeil moved to Chicago and worked as a securities trader, supplementing his income by betting on Chicago Cubs games. He eventually became so successful at the latter pursuit, he made it his full-time occupation, and turned out so good at it that Chicago bookies began putting limits on the amount McNeil was permitted to wager on games.
Then McNeil went all Victor Kiam on the gambling industry - he liked the product so much, he bought the company, opening his own sportsbook and attracting bettors with a system he originally labeled wholesaling odds. He would rate the two teams in a football game and determine by how many points the one team would defeat the other. The point spread was born. McNeil's system became so popular with bettors that he eventually devised a way to put point spreads on basketball as well.
Betting The Point Spread
How accurate are the handicappers at setting the point spread on games? Consider this factoid - during the 2015-16 NFL season, a study conducted showed that in 72 percent of all the games played, both teams were left with a shot to either cover or beat the spread on the final possession of the game. That's some pretty solid oddsmaking at work right there.
Remember that these lines are not put in place as a prediction of what the final score will be. If the New England Patriots are listed as 14-point favorites over the San Francisco 49ers, it's not because the sportsbook believes the Patriots will win the game by that margin, it's because that's the balance they must provide between the two teams in order to get 50 percent of the money bet on each team. By doing so, the sportsbooks ensure that they will make money no matter which team wins.
How Are Point Spreads Set?
Point spreads are impacted by a number of contingencies, but one of the most valuable to keep in mind is the weekly injury report that the NFL releases every Thursday during the season. This is vital information to have, and can indicate a significant swing in the outcome of the game.
Think about Super Bowl LII. The Patriots were 4.5-point favorites, but it was also known that New England quarterback Tom Brady was nursing an injury to his throwing hand. Those willing to give solid credence to this cashed in when Brady was ineffective and the Eagles won the game by a 41-33 margin.
Perhaps the most famous - or was it infamous - point spread was on Super Bowl III. The NFL champion Baltimore Colts had lost one game all season and were installed as 18-point favorites to destroy the AFL champion New York Jets. The AFL had suffered lopsided setbacks in the first two Super Bowls but Jets QB Joe Namath insisted the beatings were over and guaranteed a New York victory. Then the Jets went out and delivered, handing the Colts a 16-7 setback.
Often, when point spreads are that widespread, a phenomenon occurs where the vast majority of the bets are placed on the longshot, while the large-figure bets are placed on the favorite. You end up with more money bet on the favorite and more bets wagered on the underdog. Such was the case when boxer Floyd Mayweather Jr. faced UFC fighter Conor McGregor in the squared circle in 2017. There were some huge wagers placed on Mayweather, the prohibitive favorite, but about 75 percent of all bets were on McGregor.
This occurs because the big-money gamblers recognize that such a massive point spread is a fallacy to get people to bet on a team with little to no chance of winning. Meanwhile, the smaller players are willing to lay that risk because of the potential for such a massive winfall.
Bookmakers understand this concept and will tend to shade the point spread toward the favorite, in the hope that it will cause more money to be wagered the underdog, a team that sometimes will have little to no chance to win the game. Studies have shown that even when this edge is given to the favorite, still around 65 percent of bets will be laid on the favorite.
This despite the knowledge that the point spread makes it less likely that a favorite will be a winning bet. A study of all NFL and college football games played in 2003-04 showed that favorites were winners 413 times, underdogs won 415 times and 22 games were pushes.
As much as people embrace the underdog story, whether it be the 1980 U.S. Olympic hockey team, the 1969 New York Mets, the 2015-16 Leicester City side, or the 2017-18 Vegas Golden Knights, the fact of the matter is that even when the point spread should encourage bettors to play the underdog, they still tend to back favorites.