Fundamentals of Betting

In this and subsequent initial section we shall explain the very rudimentary principles and terminologies of sports betting.

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Let's start with a simple bet between you and your friend on a tennis game between two competitive players which we shall refer to as player-A and player-B. Suppose you wager $100 on player-A to win and your friend wagers the same amount on player-B. If player-A wins, then you collect $200 - just like that. We shall refer to this type of betting where no commissions are incurred as a fair bet. However, what if your friend doesn't want to bet at all, or what if he wants to wager only $50, or what if a third friend comes along and all three of you want to wager $100 each - two of you on player-A and one on player-B. In these situations you need to place your bets through a middleman who collects bets from several bettors and distributes the winnings accordingly. This middle man is known by different names - a sportsbook, bookie, bookmaker.

Now, let's suppose that you and your friend place your bets through a middle man. In this case, you, as a winner, will not collect the full $200 but only $190 (some generous sportsbooks may give you a little bit more). This is because the bookie takes 5% of each bet placed through it; so, it works as if you and your friend each wagered only $95 instead of $100.  Alternatively, as many writers on the subject do, you may look at this commission as if the sportsbook takes  10% of your winnings as a commission. Whichever way you want to look at it, the sportsbook always gets his/her/its vigorish (also called juice or simply vig).  When it is in the context of general gambling the vigorish is referred to as the house edge.

Considering the services they are giving, and the risk they are taking, 5% is a reasonable price to pay for a sportsbook. It is worth noting that the sportsbooks are also betting indirectly on the outcome of a game. Suppose that ten bettors place $100 each on player-A to win, and only five bettors favor player-B for $100 each. If player-A wins, then the sportsbook has to pay out a total of $1900 for the ten bettors. So he has to come up with $400 of his own money since he has collected only $1500 from the fifteen bettors. He certainly would be praying hard for player-B to win inasmuch as he has more at stake than the individual bettors. Well, this really may never happen since the bookie makes several adjustments, one of which will be seen in the odds and prices section, in order to ensure that bettors are equally distributed on each side of the competitors. Also, it is worth mentioning that state owned lotteries snatch about 50% of your money in commissions, and yet there is very little or no risk involved in lottery games on the part of the state.

Last, but not least, is that all important question of picking the winner or the handicap. This major part of betting is unfortunately a task the bettors have to overcome by themselves. No one can tell an outcome of a game (or any other event, for that matter) with absolute certainty. The bettor has to consider several factors such as where the event is taking place (home-field advantage), injuries, previous encounters, and even that Nadal is unbeatable on clay. Sometimes, you just have to follow your guts or pick your home team. If you seek the assistance of a pro in sports, there is a plethora of individuals and companies that go under the title of Sports Handicapping Services who sell sports picks. They claim to correctly predict 60%, 70%, or more of a set of games such as a weekend NFL games (pro football picks) or NCAA games (college football picks). They also offer picks on week-long games like NBA (basketball picks) and MLB (baseball picks).