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People are always looking for a new way to enjoy betting on sports. One of the more up and coming methods is to bet on the ‘spread’ but how does spread betting work in sports?
What is sports spread betting?
In order to answer the question ‘how does spread betting work?’, the first port of call is to understand what sports spread betting is. In short, sports spread betting is where a punter bets on an outcome being less or more than a benchmark set by a bookmaker; you could think of it as playing ‘higher or lower’ against a bookie.
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The key terminology for sports spread betting
There are three main pieces of terminology to familiarise yourself with before we get stuck into the detail. These are ‘buy’, ‘sell’ and ‘stake’.
We’ll start with a look at the ‘stake’ as this is a term that almost all traditional bettors will be familiar with; forget what you think it means. When you’re asking ‘how does spread betting work?’ the word ‘stake’ actually means something different. It is still linked in to how much you risk but not in the same manner. If you were to stake £10 you’re not risking £10; instead, you are risking multiples of £10. We’ll cover this in more detail as we progress but it is an important thing to remember.
The ‘buy’ and ‘sell’ terminology are linked to that bookmaker benchmark we touched on. If you want to strip away spread betting jargon then you could consider it as simply being a substitute for ‘over’ and ‘under’. When you ‘buy’ what you’re saying is that the actual outcome of an event will be over what the bookmaker has predicted. By contrast, when you ‘sell’ your expectation is that the bookie has pitched their prediction too high i.e. the actual outcome will be under.
Depending on how far over or under the actual outcome transpires to be defines how many multiples of your stake will be won or lost.
Now, we realise that’s probably as clear as mud for you so let’s explain it with an example. We’ll be using a football market as it’s the most popular sport but spread betting is available for pretty much every sport you can think of.
How does spread betting work – A football example – Total Goals
One of the most popular football bet types is the total number of goals that will be scored in a game. The starting point for any form of bet will be the fixture and the level at which the bookmaker pitches their prediction.
Let’s use the example of the recent Carabao Cup final between Manchester City and Tottenham, which took place on Sunday 25th April.
Say, the bookmaker took the stance that the game would see a total of three goals. You’d then see an associated spread of, perhaps, 2.8 – 3.0.
As the punter, your task is to decide whether you think there will be more or less than three goals scored.
If you bought into Ryan Mason’s comments about Tottenham being an attacking side who want to play on the front foot then you might have expected there to be lots of goals; therefore you would ‘buy’ at 3.0 (the upper end of the spread). If, however, you thought that old habits would die hard and Spurs would attempt to stifle Man City then you would feasibly have predicted fewer than three goals. At this point, you’d ‘sell’ at 2.8 (the lower end of the spread).
The betting scenarios
When placing spread bets there are two possible outcomes. You either win or you lose. For the purpose of keeping maths simple, let’s assume you used a £10 stake.
Let’s look at a winning example first. If you ‘buy’ at 3.0 with a £10 stake you would collect £10 for every goal over the bookmakers benchmark; for example, had the match ended 4-2 there would have been six goals scored. This equates to a £30 return:
(Total goals – Predicted goals = X) * Stake
(6 – 3 = 3) * £10 = £30
The losing scenario occurs when the total goals in the game don’t reach the level predicted. We know that the game in question finished 1-0 to Man City. This means the total goals fell two short of the level the bookmaker set; you’d lose £20:
(Total goals – Predicted goals = X) * Stake
(1 – 3 = -2) * £10 = -£20
Of course, you can place ‘sell’ bets too. The maths works exactly the same way except you make a profit when a game falls short of the bookmaker prediction and lose if there are more goals.
How does spread betting work compared to traditional betting?
We very briefly touched on the world of traditional betting when talking about the term ‘stake’ early in the article. Now though, we are going to explore how sports spread betting compares to the more widespread fixed odds betting market; after all, if you consider the type of events you can tap into through spread bets you can find equivalents with the traditional bookies.
The key difference is the one that holds most bettors back – you don’t know how much money you might lose. We’ll stick to our example of the total goals market with the Carabao Cup final still the match in focus. You could have placed a bet on there to be over 2.5 goals in the match at odds of 1/1; if you had done so with a stake of £10 you would have done so comfortable in the knowledge that come the final whistle the worst case scenario is that you’d be £10 out of pocket.
Of course, there is a flip side to this that many choose to forget. In the scenario that the floodgates had opened and the match had ended 4-2 your bet with the traditional bookmaker would have only paid out double your stake; assuming the same £10 stake, you’d walk away with £20. That would also be the case had it ended 4-3, 4-4, 5-4 and so on. How does spread betting work as more and more goals go in? Your winnings would have climbed up and up too. Yes, it means you can have substantial risk attached to your bets but you can also walk away with profits that are substantially more handsome than those on offer through fixed odds bets. Punters who understand that are the ones you’ll find dabbling with betting spreads on a regular basis.
Regulations and Taxes
Although spread betting is growing quickly in sports its actually a concept that has been adopted from financial markets. It is for this reason why spread betting doesn’t fall under the gambling commission with the Financial Conduct Authority instead seeing over its development. The other factor is the because of its classification, your profits do have to be declared for tax purposes.
Who are the best companies offering spread betting?
After you’ve addressed the question ‘how does spread betting work?’ you’ll want to know how to move forwards with it. Now, when it comes to spread betting, there are two main players operating in the UK marketplace. They are SpreadEx and Sporting Index. Here we take a quick look at them in a bit more detail.
We first look at SpreadEx who were formed back in 1999. They can boast a unique position in as they are the only operator to present their customers with options to place bets via fixed odds betting or through betting spreads. That’s far from the only thing they have going for them though with their innovative approach to sports gambling extending into a range of different areas; another one of those is their willingness to afford customers credit whilst their tools can be used on desktop and mobile devices with apps available for both Android and iOs devices.
It’s this sort of vision that has helped the St Albans based company establish themselves as one of the most respected names in the sports betting sector. Their published figures show that they’re turning over consistent profits, which should reassure traders, whilst they’ve been widely recognised both for their spread betting and their wider business.
SpreadEx might be able to shout about their awards but when it comes to the market leader in sports spread betting in the United Kingdom there is only one winner; that’s Sporting Index. They’ve been in operation for just shy of 30 years and during that time they’ve managed to attract and retain somewhere in the region of two thirds of the overall sports betting market. It’s something that has forced their staff to grow at a simply ridiculous rate with over 300 employees split between their two main offices; it’s a remarkable number given just five individuals started on the project back in 1992.
In addition to the all round strength of the platform; Sporting Index also go out of their way for customers who cannot live and die by huge cash deposits. SpreadEx do this via a credit system whilst Sporting Index opt not to have a minimum stake; this means you can wager as little as one pence. Again, like SpreadEx, Sporting Index’s site can be accessed on a range of different devices.
Who is the better spread betting provider?
We might have just labelled Sporting Index as the “only one winner” but that was based purely on the fact they possess a larger chunk of the market. The more honest truth is that with two such big names it’s hard to say one is better than the other. If we were pressed on the subject, however, then we’d have to lean towards SpreadEx.
The main reason for this is very much opinion based on the fact that their site is more user friendly; the look and feel of the site is slick and intuitive whilst Sporting Index is somewhat in need of a modernisation. The second port of call when tossing the two up together is the service level you receive. For this, a look at the independent site Trust Pilot is useful. There isn’t much between the pair but SpreadEx did come out on top at 3.5 compared to a 3.1 rating.
How does spread betting work? FAQ
Do all bookmakers offer spread betting?
No. Traditional bookmakers typically only offer fixed odds betting. For spread betting, you need to use a specialist bookie.
What bookies offer spread betting?
The biggest names are SpreadEx and Sporting Index.
Is spread betting only available for football?
No. Spread betting is offered across almost every sport you can think of.
What sort of markets can spread betting be used on?
Spread bets can be placed across pretty much any market where it’s possible to bet over or under. This can be goals, corners, booking points. In sports like tennis you can bet on points, aces and more whilst even horse racing features amongst spread betting with the number of lengths a horse might win or lose by.
Is spread betting available on in-play markets?
Yes. Spread betting is available on in-play and pre-match markets.
Is spread betting limited to sport?
No. Spread betting in sports is just one area of spread betting.
When did spread betting start?
Spread betting started in 1974 when a stock broker launched the idea.
When did sports spread betting first come around?
Sports jumped on the growing trend of spread betting in the 1980s.
Can anyone spread bet?
Physically, yes. Should they? Possibly not. Spread betting is a form of betting for the more experienced and analytical sports trader mindset. You can learn though.
There you have it, a guide to spread betting. Now, next time someone asks you ‘how does spread betting work?’ you’ll know how to answer.