The sports gambling world is remarkably similar to Wall Street market making, and is therefore normally a pretty boring affair. A sports line is set according to the balance between buyers and sellers. Set the line on the favorite too high, and money floods in on the underdog, and vice versa.
So I was pretty shocked to see the opening line on next week's Denver vs. Jacksonville game, like many in the sports betting world. It's no secret that Peyton Manning is on a hot streak and is breaking records left and right, but here's one even he has to be surprised at: the Broncos are favored by 28 points over the Jaguars, making it the largest spread on an NFL game in Vegas history.
Let me put that in perspective for those of you who don't bet. The Jacksonville Jaguars are winning by 28 points before the coin toss. Before a single play is called, before Manning even takes the field, the Jags are up by 4 touchdowns.
Some of you may be wondering where Vegas figures out opening lines. Having a bit of experience in this area, I can tell you that before Vegas ever sets an opening line, there is what is known as an "outlaw" line. The outlaw line is basically what's going on in the Wild Wild West of sports gambling. It is usually set by a group of small timers and then the market reacts, adjusting the posted line in Vegas one way or the other.
This is all some beautiful free market stuff at work here. Courageous bookies can offer outlaw lines to their clients (outlaw lines come mostly from offshore sources, so the bookie has to be fairly tech savvy) knowing that the line is going to shift (often dramatically) before kickoff. The purpose of all of it is to strike a perfect balance between those betting on the favorite and those betting on the underdog.
As loathe as I am to bet against Peyton Manning in the middle of this streak he's on, 28 points in an NFL matchup is unheard of. Making Jax a 28-point underdog shows so little respect for a professional football team that it's almost too good to pass up. But I once had 55 points going into a college game and ended up losing, so I'm hesitant to bet the ranch.
What do you guys think? Is Manning a 4-touchdown spot good? Is Jax that bad? You almost have to take the points, right? What is the trader in you telling you to do?