Sports betting has taken the United States by storm. Since the repeal of PAPSA in 2018, 38 states & territories are now offering legal, regulated sports betting. Many other states are set to legalize online sports betting within the upcoming two years.
With our unparalleled Sports Betting API & Odds Screen, OpticOdds has been key to industry growth. However, in this article, we’re going to take a step back & go through the basics: “How do Sportsbooks Set Odds in the first place?”
For sportsbooks, there’s two parts to setting odds. Both are essential to success.
Opening the Market (Initial Odds)
Moving Odds (Line Movement)
Opening Odds – Setting the Initial Line
“Opening the market” just means setting the initial line. Who should be favored & by how much?
Sportsbooks are experts in setting lines and have invested millions of dollars into their ability to price games. Here are just a few of the many factors that go into setting opening odds:
Performance: LeBron James averaged 25.7 points per game (ppg) in the 2023/2024 season. Thus, it would make no sense for a sportsbook to open his line at 10.5 points. Historical statistics & performance is the baseline to opening the market.
Injuries/Lineups: Of course, if a star player is out, sportsbooks will open the market differently. For example, if Anthony Davis is not playing in a game, then LeBron’s player points line will probably open at a higher number (i.e. 29.5 as opposed to 25.5). This would make sense, as LeBron would be more likely to take the scoring load.
Matchups: Patrick Mahomes may average 250 passing yards per game, but if he’s playing against a weak defense, then the line will be impacted. Against a subpar defense, Mahomes’ passing line may open closer to 300 yards.
Home Court Advantage/Weather/Etc.: Sportsbook models price in weather and many other factors into opening lines. For all intensive purposes, any public information should be priced into the market (i.e. minutes restrictions in the NBA, comments from the coaches, etc).
Other Betting Markets (Sportsbook Odds): This is where OpticOdds becomes so valuable. If two other sportsbooks have already released odds for an upcoming game, then there’s already two data points on where the line should be set. Let’s say these sportsbooks are opening the Mahomes’ line at 250.5 passing yards. Then it makes sense that you would not want to open your market at 315.5 yards, or you’d at least want to be extra cautious in doing so. As a sportsbook, you have hundreds of other points of comparison on where the line should be set since nearly all bookmakers set their own prices.
The OpticOdds Odds Screen ensures that you are never off from the market upon opening. OpticOdds offers real-time odds and lines from over 200 sportsbooks, including player props & alternate markets.
Moving the Odds (Line Movement)
After the market has opened, there’s still work to do. Just like the price of a stock, sportsbooks are constantly adjusting odds based on:
Injuries/Lineup News: In the NBA, star players take rest days frequently. This of course impacts all lines in a game, from the spread to player props. If Giannis is resting, then the Bucks will be less likely to win (the moneyline/spread have to move) & Damian Lillard will be more likely to score additional points (prop lines have to move). Sportsbook odds & lines are always reacting to new information in the market, just like the price of a stock changes due to an earnings report.
Weather Forecast Changes: Weather of course applies to the NFL and MLB more than the NBA. If high wind & snow become probable for an upcoming NFL game, then sportsbooks will move the total lower since less points are expected to be scored.
Betting Volume: Every wager is a source of information. If all of the profitable customers are betting in one direction, then that’s an indication that the odds are incorrect & there’s value being offered. For example, if a player prop is being offered at +200 odds and continues to see betting volume from profitable customers, then the line should move to +175 then +150 then +125. Keep moving the odds lower until one directional volume from profitable customers stops.
Market Movement: OpticOdds provides line movement charts & alerts to market changes in real-time. If every other sportsbook drops the odds on a wager from +400 to +200, then that’s an indication that you should consider changing the odds, too. OpticOdds allows you to set up custom alerts, consensus lines (& much more!) to ensure you’re never off from the market. “Dialed-in” pricing is essential to maximizing profit margin.
