Do Books Strive To Balance Their Action on Both Sides of a Line?

What's the deal on the sports books trying to get an equal amount of money on both sides of a line? I've heard that the books don't want their action to be too heavy on one side or another, because then they're just gambling. But it seems to me that a 4.5% advantage isn't all that much and the casinos have a lot of overhead in supporting the books. Do they really try to walk that fine -- and low-profit -- line?

Yes, you heard correctly: Sports books do try to “balance their action,” meaning they take an equal amount of money on both sides of a contest to guarantee a profit. It's solid in theory and is usually the goal.

But it's rarely the reality. There’s almost always more money on one side than the other, either naturally or by design.

When it’s by design, it’s because the book has "an opinion" or is “taking a position” on a game based on what it thinks will happen. The book is still getting its juice from the bet-$11-to-win $10 proposition, but it's also gambling a bit. Some books don’t mind the extra exposure, while others prefer to play it straight.

Our author, Chris Andrews, writes in his book Then One Day ..., "My bookmaking philosophy has always been to take bets in the most advantageous way for the house to profit. I like to have some balance, but it’s not my primary goal. If I have the wiseguys on one side and the public on the other, I’ll do my best to go in needing the wiseguy’s side to win (we wouldn’t call them wiseguys if they weren’t good). If I have a public bettor who I know isn’t a wiseguy and is just straight-out gambling, I’ll put him on for a big bet as long as he’s betting what I believe to be 'the right number,' meaning he hasn’t caught me in a mistake. Of course, this can lead to some very unbalanced games, but that’s okay with me."

In other words, say a book finds itself with a sizable position on one side of a game. In general, if the bets have been made by known winning players, it's usually a good idea to move the number to try to get some action on the other side (and get balanced). However, if the bets have been made by a lot of recreational players, it's not nearly as critical to move quickly, which means maintaining an unbalanced position on a game.

The conservative sports books want simply to earn their profits with balanced action, while the sharp books actively look at the week's roster and try to build positions on games they like, often by shading their lines. A sports book director who knows exactly what he's doing (and a lot don't; Then One Day has two chapters titled "Adventures in Bad Bookmaking") will employ proper risk management to ensure that he doesn't build too big a position in any one spot. Besides, an unbalanced book is often unbalanced with plus money.

In addition, it's dangerous for a book to overreact and move lines too much. The dreaded middle comes into play in those situations. Or the book will raise the vig. Though this prevents the book from getting middled, it also annoys the recreational customers who don't like (or don't understand why) they have to pony up more juice.

In the end, while some books still strive to balance action, it's not how the best books behave, and those are the ones that make the most money.

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Dave Jan-29-2021

Casinos and sports books do not gamble.

They may be in the gambling business, but they do not like to gamble themselves.

Oh, sure, they'll take risks, but CALCULATED risks. Elsewhere in the casino, every game has iron-clad probability and house edge. Oh, sure, there may be variance, but the numbers are the numbers.

Sports betting is a different animal, with too many unknown factors, so balancing is important.

If every bet had equivalent action on both sides, the book's risk would be zero. While that type of equilibrium is rare, if they do their job correctly, the balance would be close, and their risk would be minimal.

And when many people are betting on one side of an offer, they'll adjust the line in an effort to balance the betting to reduce the risk.

Of course, as pointed out in the LVA answer, sometimes they'll take the extra risk and won't adjust the line.

[email protected] Jan-29-2021

4.5%

I'm surprised you didn't address the questioner's assertion that "a 4.5% advantage isn't all that much".  In fact, that is substantial.  Any professional blackjack or video poker player who could consistently get a 4.5% advantage would be turning cartwheels.  Churning out a $45,000 profit on every $1,000,000 of action, day in and day out, will make you very, very wealthy!

lisajeffwork Jan-29-2021

How do they know ?

How do they know who is making the bets and who are wiseguys? Because they are large betters and/or are betting routinely which indicate wiseguys?

Roy Furukawa Jan-29-2021

Wiseguys

I would think wiseguys are regulars that most sportsbooks know by name, exploit early lines that they determine to be wrong and are likely to be putting down bets that are pretty substantial and aren't just putting $10 on their favorite team.

Question of the Day - 29 January 2021

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