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Spread betting is a particular type of gambling that involves correctly predicting a range, instead of a binary outcome. It is particularly common in the field of sports gambling, offering alternatives to simply betting on whether teams win or lose. Spread betting is considered a relatively modern form of gambling, generally recognized as having been invented in the 1940s.
In normal win-or-lose betting, an individual simply bets money on whether an event will occur, or not. It is known as binary gambling because there are only two possible outcomes. This type of betting usually revolves around winning and losing, but not always.
Binary gambling lends itself to any variety of situations, from political elections to financial markets to sports. It basically applies in any situation where the outcome is uncertain. Bettors in spread betting, by comparison, wager not just whether one outcome will occur or not, but also on the accuracy of their prediction. Spreading betting can therefore be more creative in the kinds of wagers that can be offered, with a wide variety of conditions that can lead to winning money.
With spread betting in sports, bookkeepers and gambling houses assess a given match, and assign a spread of points between the two teams or competitors that gamblers wager on. For example, in a game between two football teams, the spread may be seven and a half points between the favorite and the underdog. A bettor puts money on whether he thinks the final result of the match will be within that point spread or not. Bookmakers normally set spreads by the half-point to prevent ties.
An underdog may lose the game but still score enough points to get within the assigned range, something known as covering the spread. In this way a gambler can win money on a losing team, if it manages to cover the spread. In the same way, a team that wins a game may turn out to be a losing bet for some people, if they don't win by enough points to cover the spread.
The point of giving a spread is to make it more appetizing for people to bet on underdogs. By not having to bet that they win, there is more incentive to put money on them, which benefits bookmakers who make their money on commissions and not the outcomes. Bettors may also make binary bets in addition to betting on the spread. For instance, someone could bet on an underdog to cover their spread, but also on the favorite to win outright. Spread betting has proven highly popular around the world since its appearance in the gambling industry.