The old story is that books balance both sides and collect the fee. It is mostly wrong, and the truth explains far more of what you see.
The story most people are told is that a sportsbook sets a line to attract equal money on both sides, then collects its fee whichever way the game goes. It is a tidy story and it is mostly wrong. Understanding what books actually do explains far more of what you see on a board.
Very few sportsbooks produce their own opening prices. Those that do are called originators or market makers. Everyone else is a copycat: they take the market's number, add their own fee, and adjust when the market moves.
An originator's opener is a first draft. It comes from a model, adjusted by a trader for the things the model does not see, and it is posted at a deliberately low limit — sometimes a few hundred dollars.
The low opening limit is the point. The book is inviting informed bettors to tell it where the number is wrong, cheaply. Every bet against an opener is free information.
Limits climb through the week as the number is tested. By kickoff a major NFL game might take six figures a bet at a market maker — because by then the book is confident, and it has been corrected as many times as it is going to be.
A perfectly balanced book does guarantee the fee. It also guarantees the book never profits from being right. In practice most operators are happy to carry exposure when they believe their number is better than the money coming in.
| Market maker | Recreational book | |
|---|---|---|
| Makes money by | Volume at a thin fee | A large fee on casual bets |
| Wants | To find the right number | To be liked and kept |
| Limits | High and rising | Low, and cut on winners |
| Reaction to a sharp bettor | Take the bet, move the price | Limit the account |
| Fee on main lines | ~2% | ~4.5% and up |
Both are legitimate businesses. But they are optimising for opposite things, and which type you are on changes what you should bet. Lesson 10 covers that in full.
Those four look identical on a chart and mean completely different things. Telling them apart is the skill, and it is the next lesson.
Bet-count percentages are dominated by small wagers. A book showing 92% of tickets on the favourite may still have more money on the underdog. Where those two figures disagree, the money is the one that means something.
The board records where each market opened, so you can see what has moved since. Watch the openers.