What point spreads can teach you about implied win probabilities
Point spreads are the most popular way to wager on NFL games, which is good news for the folks in Las Vegas, but the public (and their wallets) would be bettor off focusing more on money lines.
To the sports wagering tyro, the point spread, spread, or line is a number set between two sides or teams (e.g. +/- 6). Bettors who wish to wager on the favorite must subtract the number from the favorite’s final score, and if the team remains victorious, the bettor covers the spread and wins the wager.
The opposite is true for the underdog: investors on the underdog’s side add the value to the underdog’s final tally, and if that quantity is greater than the favorite, then these bettors cover the spread.
NFL Historical Cover Rate Per Closing Spread
While successfully covering the spread is incredibly challenging in the long-run (see figure 1.0 above), NFL handicappers can leverage the point spread to estimate a team’s implied win probability to assist with identifying value in money line wagering.
Money lines are the American odds-makers’ system for quoting odds or probability of victory for each team. Bettors on the money line need only select the winner, no spreads.
