Online Wagers guide - Sportsbook and Betting - Why Lines Move
When two players bet the standard $100 to win over $100, one risking on a team with -4 and the other on +4, then the sportsbook makes $10 irrespective of the outcome. The only exception would be if the +4 team wins by 4 points, then both bets would lose and nobody would make any money. Since the total amount bet is $220, the house's gross profit % would be about 4.5%. This number is the Theoretical Hold Percentage or THP for a straight wager.
Why is it theoretical? In the real world, even the best online sportsbook betting action is never perfectly balanced and sportsbooks almost always have a vested interest in the outcome of every game. When this happens, the result could lead to a loss for the house and the sportsbook is exposed. Each sportsbook decides the extent of exposure it can be given on any event. It is a combination of this tolerance for risk and the sportsbook's betting action that drives line changes. If a sportsbook has $5,500 wagered by its clients on TeamA -4 and $2,200 wagered on TeamB +4, then the sportsbook stands to lose $2,800 if A covers but stands to win $3,500 if B covers. Although it may not seem like much risk, if you multiple these numbers by 10, 20, 50, 1000 or more, it is understood why sportsbooks move lines to balance action. Some sportsbooks handicap the games themselves and may shade the line by half point or more in order to encourage more betting on the team they think will not cover.
The reason sportsbooks don't balance action at any cost is because there is also a risk involved every time a line is moved. It is the risk of getting sided or middled that keep books from moving lines, and it is the risk of having a position on a losing team that force them to move the line. Books that move lines too far can suffer heavy losses with a bad outcome, as will books that don't move lines enough. Every book moves lines a little differently and so each new day will see differences in the lines between books for the exact same game.