Federal Sports Betting Regulation in the US
Introduction to Sports Betting
The Basics of Sports Betting
At its core, sports betting is straightforward: you predict the outcome of a sporting event and place a wager on that prediction. If you're right, you win money. If you're wrong, you lose the money you wagered.
Think of it like any other prediction market. The person or entity accepting the bet is called a bookmaker, sportsbook, or simply "the house." They set the terms of the bet, known as the odds. These odds reflect the probability of a particular outcome and determine how much you can win.
Data is the backbone of modern sports betting.
For the sportsbook, the goal is to make a profit by balancing the wagers on both sides of an event. They do this by setting odds that encourage an equal amount of betting on each outcome and by taking a small commission on bets, often called the vigorish or "juice."
Common Types of Bets
While you can bet on almost any sport, from football and basketball to soccer and tennis, most wagers fall into a few common categories. Understanding these is the first step to understanding the language of sports betting.
| Bet Type | What You're Betting On | Simple Example |
|---|---|---|
| Moneyline | Which team or individual will win the game outright. | You bet on the Los Angeles Lakers to beat the Boston Celtics. |
| Point Spread | A team winning or losing by a certain number of points. | The Kansas City Chiefs are favored by 7.5 points. They must win by 8 or more to "cover the spread." |
| Totals (Over/Under) | Whether the total combined score of both teams will be over or under a set number. | The Over/Under for a soccer match is 2.5 goals. You bet on whether the final score will be 3 goals or more (Over) or 2 goals or less (Under). |
| Parlay | A single wager that links together two or more individual bets for a higher payout. | You bet on the New York Yankees to win AND the total runs in that game to be Over 8.5. Both must happen for you to win the parlay. |
| Prop Bet | A specific event happening (or not happening) within a game. | Will a specific player score the first touchdown in a football game? |
| Futures | An outcome that will be decided in the future, often at the end of a season. | Placing a bet in August on which team will win the Super Bowl in February. |
Moneyline bets are the simplest, but point spreads are incredibly popular in sports like American football and basketball, where scores can vary widely. The spread is a handicap the sportsbook applies to level the playing field, making the matchup more balanced from a betting perspective.
Key Terms to Know
Like any specialized field, sports betting has its own jargon. Here are a few essential terms to get you started.
Wager
noun
The amount of money risked on a bet. Also known as a "stake."
The odds are the numbers that tell you two things: the implied probability of an outcome and how much money you will win. For example, odds of +200 mean you would win $200 for every $100 you wager. Odds of -150 mean you must wager $150 to win $100.
A negative number (-) always indicates the favorite, while a positive number (+) indicates the underdog.
A push is a tie from a betting standpoint. If a football team is favored by 3 points and wins by exactly 3 points, all bets on the spread are returned. No one wins, and no one loses.
The sportsbook's commission is called the vigorish, or vig (also known as the "juice"). It's the reason why you often see odds of -110 on both sides of a bet, like a point spread or a total. You risk $110 to win $100. That extra $10 is the bookmaker's built-in fee for taking your action.
This fundamental vocabulary and understanding of bet types form the foundation of sports betting. With these concepts in hand, you can begin to understand how betting markets operate.