The possibility of winning a prize is one of the primary reasons why sports betting is so popular. However, there is an ongoing discussion about whether sports betting is a zero-sum game. In this article, we will present information that can help you learn more about this in terms of sports betting. Keep on reading to find out:
Describing the Zero-Sum Game Term
A Zero-Sum Game is a situation, particularly a competitive one, wherein an individual's gain equals another's loss, resulting in a net benefit. It indicates that when one party gains, the others will lose an equal amount. Occasionally, this term describes situations in which a person's earnings correspond to losses. Poker is a good example of a zero-sum game since the winner takes everyone's stake minus the rake.
A zero-sum game can involve two or more participants. You can find these games in different contexts. Poker and other gambling games are some examples of zero-sum games where one player wins, and the rest loses, resulting in a zero-net benefit for all participants. This situation is the opposite of win-win circumstances. Regarding sports betting, the term "zero-sum game" is used when the winners will only profit from the loser's stake.
How Sports Betting is Not a Zero-Sum Game
Sports betting is done so that winners of specific wagers will get more or less money than the stake amount betting against them. In sports betting, payouts are calculated based on the odds provided by the bookie and the stake you put down on a betting ticket. You might observe how the odds are displayed depending on where you place bets.
These sports odds are based on the probabilities of an event happening. The underdog tends to pay better odds than the favorite in NBA, MLB, and NFL money-line bets. However, underdogs have a higher chance of losing, and the odds of the excellent team beating the underdogs are high. Hence, there is a crucial tradeoff. Those on odds that are likely to win or happen get a small return, while those who take riskier bets can reach stratospheric payouts.
The payout can include casino bonuses once you play a particular number of games on a similar ticket. Operators will add casino bonuses to your winning prize. Hence, a zero-sum game is not possible in sports betting.
How Do Bookies Make Sure Betting Is Not a Zero-Sum Game?
The goal is to take in more money than you pay out. The art of bookmaking lies in guaranteeing that this happens. They determine the odds for each bet, allowing them to guarantee a profit.
Bookmakers earn a profit by doing the following:
- They set the correct bet prices to include the vig.
- Eliminate risk by balancing the book.
- Setting and changing the betting lines.
- Base actions depend on the bettor's emotions and lack of knowledge.
Vigorish (vig) - also is established in the odds bookmakers set to assist them in making a profit. It is a commission charged for laying bets. The inclusion of vigorish is the primary strategy used by bookmakers to tilt the odds in favor and ensure they profit from every wager made on their platform.
To conclude, sports betting is not a zero-sum game because betting in sports depends on the odds that the bookies provide. And regardless of the result of a sports event, bookmakers make sure that they gain a profit.
Sports betting is not a zero-sum game since winners of a specific outcome will get a different payout than the bettors who backed the opposite wagers. The way sports betting payouts work does not correspond to the zero-sum game definition, where it always produces a net gain of zero, with one party losing and one party winning.
This article was published on September 23, 2022, and last updated on September 6, 2022.