A sportsbook is a specialized service that accepts wagers on a variety of sporting events. It is often accompanied by a racebook, casino, and live gaming options. Its main function is to accept bets from customers and pay out winning bettors while taking a cut of the total bet amount as its profit (vig).
While the days of physically visiting a sportsbook are long gone, there is still a great demand for sports betting services. As more states legalize the activity, new online and mobile sportsbooks are popping up. While some are purely sportsbooks, others offer other types of gambling like horse racing and casino games.
Besides moving betting lines in against-the-spread and moneyline bets, sportsbooks also adjust the odds of over/under or prop bets. This is mainly done to induce action on both sides of the market and balance their liabilities. For example, if Patrick Mahomes’ passing total opened at 249.5 yards, the sportsbook would lower the over and raise the under to induce action on both.
Point spreads level the playing field by requiring the favorite to win by a specified number of points, goals, or runs. This type of bet is common in football and basketball betting, but is also found in other sports, such as UFC fighting. Using the same approach as for the analysis of margins of victory, we estimate the expected profit on a unit bet if a sportsbook’s proposed line deviates from the median margin of victory by 1, 2, or 3 points.
