A punter considering making a wager on a game between Manchester United and Bradford City will naturally want to make a wager on the favourites. Many punters will feel the same way and want to place a bet on United to win. However, if everyone places a wager on United, and no one places a wager on Bradford, then most bookies can’t take bets because of the risk involved. To enable a fair match and encourage more chances on Bradford City, bookies would allow punters to place spread bets on the game’s outcome by giving United a handicap or Bradford an advantage.
What Is “Spread Betting”?
In investment terms, spread betting is making a wager that the price of an asset, stock, or commodity will go up or down, even though the investor doesn’t own the asset or stock. Essentially, an investor attempts to gauge and predict which way the market will move and make a profit from it. In sports betting, spread betting is making a wager on a chance outcome, where a punter gets incentivized to be as accurate as their predictions. Spread bettors don’t win for only making the correct prediction, but the prophecy must also be valid. In most sporting events, betting markets, and wagers, a punter must predict which team will win or lose, not the game’s exact score. However, spread betting incentivizes punters to make the correct wager for goals scored.
Spread betting’s other name is handicap betting because a spread or handicap is given to the stronger team when two unequal teams participate in a game. The purpose of spread betting is to attract more punters to make wagers on both outcomes rather than most punters gravitating towards making wagers on the favourites (which is how it is in most cases).
Features Of Spread Betting
The key features of spread betting include risk management tools for bookies, closer outcomes on wagers, consistency, and accuracy, and requires an underdog and a favourite to participate against each other.
1. Risk Management For Bookies
Bookies use spreads as a risk management strategy to increase or decrease the total number of wagers on a particular outcome. Spread betting helps bookies even out the total number of uneven bets made on the favourite by incentivizing more wagers on the underdog. If a bookie accepts too many wagers on only one outcome, and by chance, that outcome doesn’t happen, then the bookie will lose a lot of money on that one wager. Risk management is an essential tool for bookies and bettors to limit the maximum level of risk exposure on a single bet.
2. Closer Outcomes On Wagers
Spread wagers work on unevenly matched outcomes with one clear underdog and a favourite to win. If two teams are already evenly matched, then the purpose of a spread wager is useless in that scenario.
3. Accuracy Is Key
A punter bets on the result if it is either over or above the spread. The punter’s closer to the final stretch, the more profits they earn, and the further away from the space, the more they lose. If a punter feels a team will score more than five goals in a game, they can buy at 5. If the game ends with the team scoring five goals, the punter stands to win the most profit. If the game ends with anything above five goals, a punter still stands to make some profit, with the profit decreasing as the number of goals scored increases.
4. Requires An Underdog And Favourite
Making a spread wager requires a clear underdog and favourite. The spread reduces the difference between the teams by giving the weaker team more goals or the stronger team, fewer goals, i.e. a handicap.
5. Wagers On The Outcome
Spread wagers are wagers made on the outcome of a game or tournament. For example, punters can place wagers on the spread of goals in football, runs in cricket, points in tennis or boxing, etc. Spread wagers can also be applied to expected League finishes by the end of a football season.