Who Sets The Betting Line? The Market Makers

Jack Andrews
July 28, 2021

sportsbooks following the leader

Price discovery is a big part of any efficient market. The price is hammered into place by both buyers and sellers transacting with each other. This is true in sports betting as well. However, in sports betting, like in many other forms of commodity or futures trading, the operators exist on a spectrum of sharpness. The sports betting market is largely a game of “Follow the Leader” when it comes to price discovery. Certain market makers set the betting line. Those books have so much sway when it comes to pricing that many operators choose to move their lines only when the market leader moves, regardless of the action they are taking on a given event.

 

The Pinnacle Price

For years, the online sports betting industry had one very strong leader in price discovery, Pinnacle Sports in Curacao. Pinnacle was at its roots, a very sharp sports betting syndicate that operated as a sportsbook. They obtained the information they needed and then shaped their lines accordingly. 

They offered a great price on the side they wanted to take action on and a less than stellar price on the side they didn’t want to have liability on. This enabled them to operate on what appeared to be razor-thin margins. With worldwide liquidity, it was very profitable for them. 

Pinnacle was so respected in the business, that most books waited to post lines until they saw what Pinnacle was dealing. If Pinnacle moved a line; they attempted to move in lock-step. Pinnacle was the undisputed market maker in the world of sports betting.

That was then though. Today’s Pinnacle is not nearly the same operation that it was in the first decade of this century. Pinnacle is still a world-wide leader in sports betting and still deals low margin lines in exchange for price discovery. However, these days Pinnacle shares the throne with other books who have taken up Pinnacle’s mantle and attempt to out-maneuver Pinnacle in price discovery. 

 

The Rise Of BetCRIS And Others

Pinnacle became less of a betting book, and moved into more traditional bookmaking. BetCRIS has absorbed a lot of the sharp action in the last decade, especially when it comes to US sports. While they have always been a book willing to take sharp action, they are now renowned as the market of choice for many originators. This is due to earlier availability of lines with higher limits than many other books are willing to take. 

Being a market making book is not for everyone, it requires sharp bookmaking and the ability to identify when you’re being head faked by a sharp bettor. While Pinnacle and BetCRIS seemingly attempt to be market makers on every sport, there are other sportsbooks carving out their niche by market making on just certain sports. For instance, in Las Vegas, Circa Sports has openly said they hope to become a market making book in select markets.

What does this mean for you, though? After all, you’re still trying to sharpen your skills. You are probably far from being a profiled bettor on Pinnacle, CRIS, or even Circa. Remember I said that sports betting is largely a game of “Follow the Leader.” You can follow as well. 

Knowing which market makers set the betting line can help you get a leg up against slower moving books. You can use this information to know when the market is moving and try to figure out why. You need to know where to look for each sport. For instance, Pinnacle is still the main market maker for the highly efficient sports like NFL and EPL. CRIS holds the title for most other US sports. Offshore bookmaker, Heritage Sports, is very sharp in motorsports. Circa is attempting to be influential in college sports. 

 

Market Making Futures Wagers superbowl odds from a sportsbook

One way to spot a good market maker is in Futures markets. Futures? Yep. Futures. In a sport like Tennis, Golf, or Auto Racing where each event has a fairly rapidly evolving futures market, look for who offered the worst price on the eventual winner. 

If there are other multi-way markets, like Top 5 or Final Four, track them as well. I think you’ll find, over enough of a sample, that the market maker is often leaning the correct way on the bets that actually pay out.

Not much attention is paid to the dynamic movement of futures markets, but there is a lot of knowledge that can be gleaned from them. Futures are also a good way to measure a bookmaker’s confidence. A high hold on a futures market is a sign of uncertainty by the bookmaker. A lower hold than competitors is often a sign of confidence in their numbers. 

You can use the Unabated Hold Calculator to easily and quickly identify the hold in any multi-way market such as a futures market. The tool is straightforward, however should you need it, there is a brief video explaining how to use the tool. 

 

The Value of Betting Exchanges

Theoretically, the process of price discovery requires two components. An action and a reaction. The action is the bet being placed and then the bookmaker provides the reaction. The inefficiency of the price discovery using traditional means is that the bookmaker’s reasoning for the reaction is not known. 

A bookmaker might choose not to move their line because they know the rest of the market is watching. A bookmaker might react based on other incentives only known to them, such as their current total exposure to one side of the wager or futures liability. 

A betting exchange provides that action and reaction on a more aggregated and decentralized scale. In an exchange environment, offers are made or taken so that each relative party is quickly reaching their equilibrium point. Many sportsbooks now rely on the pricing of a betting exchange to see how a market is being shaped. 

 

Unabated’s Revolutionary Odds Screen

Building on the value that market makers provide in your betting process, Unabated will soon be unveiling an odds screen that keys on providing real-time odds from the key market makers who set the betting line in the industry. It will also feature the Unabated Line, a unique sharp line not offered elsewhere. By paying attention to market makers we hope to enable you to see not only where the odds are, but where they are going.