Ask any gambler and you’ll probably get different answers. Some will say it’s volume, others will say a few select sharps move it, and others are just conspiracy nuts and claim it just moves against them. The truth is somewhere in between and as a basic concept is pretty easy to understand.
For purposes of grasping this concept let’s take a look at game 3 of the NBA finals. The Heat opened as a 4 point favorite against the Spurs and by game time had move to 5 and even 5.5 in some places. We need to determine what it was that made the line move.
Remember that bookmakers make money when they are equally weighted on both sides of an event. That is why there is juice on a particular event. For simplification purposes we won’t focus on books with reduced juice but rather those with the standard -110 lines. Regardless of the event if one team is minus 5 in an event and the other team is plus 5 points, each wager would be -110. If I chose to lay the 5 points I would need to risk $110 to win $100. Conversely, the same thing is true if I chose to take the team getting 5 points. I would need to risk $110 to win $100. If exactly 20 people bet on the team laying 5 the book has collected $2200 in wagers. If exactly 20 people bet on the team getting 5 it has also collected another $2200. Therefore, it has $4400 in volume on the event. When the game concludes it will need to pay out the winners $2000 plus the winners $2200 that it risked. That totals $4200. Since they collected $4400 they have profited $200 on this event. Most certainly events have much bigger dollar amounts wagered on them and the profits are even larger. The books don’t care at all who wins or loses if they have balanced action. They profit either way.
Let’s go back to our example of game 3 as an example. When the line opened at 4 initial bets were coming in on the Heat at a rate and monetary volume that exceeded the amount bet on the Spurs. The bookmakers don’t want everyone having the same side because if it wins they will end up paying out more than they take in. Never a good situation for a book. To entice people to take the Spurs they will start moving the line. They moved it to 4.5 and eventually all the way to 5.5 where it went off at game tip.
In sum, they adjust lines to reduce their risk. Remember, sportsbooks have very little interest in the outcome of an event. They simply want to have equal action on each side. They profit either way if they are balanced by keeping the juice of the losing bettors. It’s important to note that mostly money moves lines. If one bettor bets $1100 on one side and ten bettors bet $110 on the opposite side the book is balanced. Even though the bets are 10 to 1 in favor of one side, they still have the same amount of money on the event and wouldn’t move the line.
Cases can be made by conspiracy nuts for advanced concepts such as line manipulation, false line moves, syndicate plays, etc. But in order to understand any of that it’s important to note and always remember that books want to be balanced. They will move lines in either direction to facilitate that goal.