Thursday, January 1, 2009

How To Calculate NFL Point Spread Odds



While the NFL point spread is the most popular type of bet in the
United States, most that bet this proposition are unfamiliar with how
to calculate the point spread odds themselves, and this article aims to
change that.


Because of the way football is scored, some point spreads are
more important than others. As such, it is worth the time to read the
article on Key NFL Point Spreads before continuing.



The Team's Winning Percentage is Everything



Before you can calculate point spread odds you must have an idea as to
how often the teams playing in the game are going to win. This is the
most crucial part to calculating fair point spread odds, as the actual
margin of victory in a game is a chance event. The more often a team
wins the game the more likely they are to win by a larger margin of
victory. To calculate how often you can expect at team to win, checkout
Smart Pro Football Handicapping.



Once you know a team's probability of winning a given game, you can
then calculate the probability of the team covering a specific point
spread.



To calculate these point spread odds you must know the conditional probability distribution for a team winning by a specific number of points given that we already know they have won
the game. This distribution for the average NFL game is referred to as
the overall margin of victory distribution and is shown below.



Overall Margin of Victory Distribution



For an average NFL game the winning team's margin of victory will follow the following probability distribution:
































Margin of Victory Exactly Less Than Greater Than Less Than
or Equal To
13.46%0.00%94.60%3.46%
22.89%3.46%90.57%6.85%
314.51%6.85%73.69%22.29%
43.39%22.29%69.31%26.45%
52.64%26.45%65.81%29.82%
64.18%29.82%60.58%34.89%
78.08%34.89%51.13%44.19%
82.57%44.19%47.78%47.54%
91.14%47.54%46.10%49.21%
105.12%49.21%39.94%55.43%
112.19%55.43%37.06%58.36%
121.01%58.36%35.56%59.90%
132.64%59.90%32.17%63.38%
143.68%63.38%27.66%68.05%
150.85%68.05%26.37%69.39%
161.40%69.39%24.43%71.43%
172.93%71.43%20.78%75.29%
181.61%75.29%18.62%77.59%
190.75%77.59%17.46%78.83%
201.40%78.83%15.54%80.90%
212.02%80.90%12.95%83.74%


To account for a margin of error, the data in the table above are
the lower limits of a one-sided 99% confidence interval based on actual
results for NFL regular season games from the 1997-2006 seasons.



A Quick Word Regarding Blowouts



A common mistake NFL point spread bettors make is betting on the blowout.


Based on the data in the table above you can see that at least
27.66% of all NFL games will end with a margin of victory of 15 points
or higher. It's easy to see why bettors bet for the blowout, as that's
roughly 1 out of every 4 games!


Bettors hate to see their team get crushed, but like it or
not, at least 12.95% of all games will have the winning team do so by
22 or more points (almost 1 out of every 8 games).


Don't let these probabilities affect you psychologically when
looking over a given Sunday's results. Your bankroll will thank you for
it.



The Home and Away Difference


Only a very small percentage of NFL games are played at a
neutral site, so it is important to take into account the difference
between winning at home and winning on the road when calculating point
spread odds.



Home Margin of Victory Distribution
































Margin of Victory Exactly Less Than Greater Than Less Than
or Equal To
12.94%0.00%94.58%2.94%
22.36%2.94%90.84%5.90%
313.24%5.90%74.55%20.27%
42.82%20.27%70.51%24.03%
52.36%24.03%67.06%27.29%
63.06%27.29%62.78%31.37%
77.70%31.37%53.28%40.62%
82.24%40.62%50.04%43.81%
90.97%43.81%48.39%45.45%
104.74%45.45%42.31%51.56%
112.07%51.56%39.33%54.59%
120.92%54.59%37.77%56.18%
132.47%56.18%34.33%59.72%
143.29%59.72%29.96%64.25%
150.47%64.25%29.03%65.23%
161.29%65.23%27.02%67.34%
173.06%67.34%22.98%71.64%
181.51%71.64%20.73%74.05%
190.76%74.05%19.42%75.48%
201.40%75.48%17.33%77.76%
211.57%77.76%15.05%80.28%



Away Margin of Victory Distribution
































Margin of Victory Exactly Less Than Greater Than Less Than
or Equal To
13.38%0.00%93.45%3.38%
22.89%3.38%88.74%7.05%
314.68%7.05%70.38%23.19%
43.38%23.19%65.45%27.80%
52.34%27.80%61.83%31.23%
64.85%31.23%55.23%37.60%
77.39%37.60%45.84%46.88%
82.34%46.88%42.32%50.42%
90.92%50.42%40.62%52.15%
104.69%52.15%34.41%58.53%
111.73%58.53%31.70%61.35%
120.72%61.35%30.30%62.81%
132.19%62.81%27.06%66.24%
143.38%66.24%22.46%71.17%
150.99%71.17%20.73%73.06%
161.06%73.06%18.91%75.06%
172.03%75.06%15.93%78.37%
181.21%78.37%13.96%80.60%
190.40%80.60%13.07%81.61%
200.92%81.61%11.48%83.45%
212.03%83.45%8.60%86.86%


The important thing to remember about the difference between
winning at home versus winning on the road is that teams that win at
home are more likely to win by a larger margin than teams that win on
the road.



With this key difference in mind, you've not got all the data you need to calculate point spread odds.



Calculating the Odds



With winning probabilities and margin of victory distributions in hand you can now calculate point spread odds.



Below are a couple of examples.



Example #1: You approximate the true winning percentage for a
team playing at home to be 58%, and the listed point spread is home
team -3 points. What are the fair odds for the home team covering -3
points and the away team covering +3 points?



Probability of home team covering -3 points:


Using the home team margin of victory distribution, when the
home team wins they will do so by more than 3 points at least 74.55% of
the time, and they will win by exactly 3 points at least 13.24% of the
time. You can use this data to calculate the fair point spread odds as
follows:



Example #1: Home Team


The top portion of this calculation calculates the probability that
the home team will win by more than 3 points. This result is then
divided by the probability that the home team does not win by exactly 3
points, as ties do not count as a win or a loss. As such, the final
probability of the home team covering -3 points is 46.84%. Using a money line converter, this equates to fair odds of +113.



Probability of away team covering +3 points:



Again, using the home team margin of victory distribution, when the
home team wins they will do so by less than 3 points at least 5.90% of
the time, and they will win by exactly 3 points at least 13.24% of the
time. You can use this data to calculate the fair point spread odds as
follows:



Example #1: Away Team


The top portion of this calculation calculates the probability that
the home team will win by 2 points or less combined with the
probability that the away team will win outright. This result is then
divided by the probability that the home team does not win by exactly 3
points, as ties do not count as a win or a loss. As such, the final
probability of the away team covering +3 points is 49.20%. Using a money line converter, this equates to fair odds of +103.



It should now be obvious that the probabilities calculated above do not
sum to 100%. The "left over" 3.96% (100% - 46.84% - 49.20% = 3.96%) is
due to the margin of error. Because we're using historical data, we
can't be 100% sure of the exact probabilities.



Example #2: You approximate the true winning percentage for a
team playing on the road to be 75%, and the listed point spread is away
team -4.5 points. What are the fair odds for the away team covering
-4.5 points and the home team covering +4.5 points?



Probability of away team covering -4.5 points:


Using the away team margin of victory distribution, when the
away team wins they will do so by more than 4 points at least 65.45% of
the time. You can use this data to calculate the fair point spread odds
as follows:



Example #2: Away Team



As this calculation shows, the probability of the away team covering -4.5 points is 49.09%. Using a money line converter, this equates to fair odds of +104.



Probability of home team covering +4.5 points:


Again, using the away team margin of victory distribution, when
the away team wins they will do so by less than or equal to 4 points at
least 27.80% of the time. You can use this data to calculate the fair
point spread odds as follows:



Example #2: Home Team



As this calculation shows, the probability of the home team covering +4.5 points is 45.85%. Using a money line converter, this equates to fair odds of +118.


As with the first example, it should now be obvious that the
probabilities calculated above do not sum to 100%. Again, the "left
over" 5.06% (100% - 49.09% - 45.85% = 5.06%) is due to the margin of
error.



Summary


Using the data and calculations provided in this article you
should now be able to calculate point spread odds for any National
Football League game.

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