The Straddle

When betting sports, knowing how much of a house edge you’re initially up against can be confusing. There are a handful of terms you’ll see that basically mean the same thing, but can be tough to interpret for a beginner. For odds presented in the modern American format, they’ll be standardized and based on a money line with -110 on each side being the default. This is where the questions begin.

It can be called vigorish (vig), juice, or quoted in terms of the cost-per-side on a two-way proposition as in “they’re dealing a 10-cent line.” These can all be confusing. Vig is a little vague. In street terms “vig” can refer to the weekly interest on a loan. Same goes for “juice.” When quoting the line in cents, as in a 10-cent line, some will ask — is that 10 cents per side or 10 cents total? It’s the latter but when starting out, none of these terms are all that obvious. That’s why I like to use the term “straddle.”

A straddle is simply the difference between the buy and sell price — or in sports betting, the difference between the two choices in a two-way proposition. To determine the straddle, simply subtract the price on the dog (plus side) from the price on the favorite (minus side). So a game lined at -180/+150 is a 30-cent straddle (or a 30-cent line). The exception is if both sides are minus, in which case you add the last two digits of each side, so -110/-110 is a 20-cent straddle (10 + 10 = 20).

Dodgers -125 vs. Braves +110 is a a 15-cent straddle. Cowboys -7/-110 vs. Redskins +7/-110 is a 20-cent straddle.

The same applies for money lines. That same Cowboys/Redskins game will also have a moneyline available. It may be something like Cowboys -320/Redskins +250. This is a 70-cent straddle. On these bigger straddles, some may think the house is trying to get away with something and charging more, but that’s not necessarily the case. In the -320/+250 example, the house edge is actually the same as a game lined -110/-110. It’s also approximately the same as an event lined -2000/+950. All three examples clock in at right about a 4.55% edge for the book.

At first glance this probably doesn’t make sense to most. Each straddle carries with it a certain house edge. At ground zero (-110/-110) the house edge is 4.55%, but that doesn’t mean that all 20-cent straddles have that same house edge. The house edge moves with the prices. As the fave price rises, the edge for the house gets systematically eaten into.

We’ll move the line 15 cents a few times and see how that affects the house edge using a 20-cent straddle.

-110/-110 equates to an average house edge of 4.55%

-125/+105 equates to an average house edge of 4.16%

-140/+120 equates to an average house edge of 3.65%

-155/+135 equates to an average house edge of 3.23%

A rough way to look at it that’s not computationally correct but will help illustrate the concept is that for the straddle, the smaller the percentage it is of the fave price the lower the house edge will be. This is why books systematically increase the straddle as the fave price rises.

When intelligently betting something like baseball, you’ll find more good plays near the edge of the next straddle break than you will at the point the break occurs. If you make your own lines and determine a play by percentage of advantage, then this stands to reason since you’re now matching your line to one that has a comparatively low house take-out. It’s easier to find a bet vs a 3% take-out than it is vs. 4.5%.

Which brings me to a point I’d like to make regarding industry-standard straddles. The Golden Nugget recently began using a 30-cent straddle — all 1H sides and totals in hoops and football are now lined -115/-115. This adds about 40% to the house edge. Instead of facing a 4.55% hill to climb, it’s 6.52% on these bets at the Golden Nugget. It’s the only book in the Nevada market that has increased its house take-out on bets like these, and it’s something we certainly don’t want to see done at other books. Once something like this begins to get accepted, you end up with what we’ve seen in other casino games, most notably 6-5 blackjack. One casino offers 6-5, it’s followed by others, and eventually you get to where 6-5 blackjack is offered on a significant percentage of tables in just about every casino. Not good.

There’s not much you can do when a place of business decides to increase what you pay for something by 40% other than stop buying there. When it comes to these 30-cent straddles, try asking why they charge more than the place next door for the same product and see what they tell you. You wouldn’t buy gas for $3 a gallon if across the street they were selling it for $2.15. The same reasoning should apply to your sports bets. Knowing how much the differences matter is the first step in helping maintain a competitive marketplace. Be a responsible consumer and just say no to -115 pricing … unless they’re a full point off market :).