Thanks. How about the other part. If I bet on something when it is -20 and it moves wildly, say to -6 by game time, do I have -20 locked in or does everyone get -6?
I'm trying to snuff out the amount of power the oddsmakers have and what their penalties are for being way off at first.
If you bet at -20 you're locked at -20. Regardless of what the line does.
Oddsmakers are trying to set the line such that bets come in 50/50. Because while you're technically betting "against the house" since they have the money, the house can't lose when bets come in 50/50.
Generally lines are set as "-110", meaning you're betting 110 dollars to win 100. That extra 10% is called the "vig". As a result, you need to win your bets at >55% clip in order to beat the vig.
So if bets come in 50/50, say 100 bets for $100 on each side [200 total], the house collects $22K but only has to pay out $21K to the winners ($11K initial bets plus $10K winnings). If bets come in 90/10 under the same scenario but the 90% side wins, the house collects $22K but has to pay out $37.8K to the winners ($19.8K initial stake plus $18K winnings). Of course the flipside is if the 10% side wins, the house collects $22K but only pays out $4.2K.
Thus if it's 50/50, the house has ZERO risk. And sportsbooks would much prefer to be zero risk and be guaranteed money.
So when bets come in lopsided, the line moves to try to equalize the betting as close to 50/50 between the two sides. But they can't change the bet they offered you up front. They can only change what they offer the next guy at the window. Your bet is locked in as soon as you make it.
The penalty for the oddsmakers is that if they set their line wildly out of sync with bettor sentiment, their risk is more substantial the longer they wait to adjust. The sooner the adjust and get to 50/50, the better their risk profile becomes.
