Spread betting is an exciting form of sports wagering which has gained considerable popularity as punters look for ways to be rewarded for the accuracy of their bet rather than simply whether they win or lose, and bookmakers try to attract wagers on as many different markets as possible.
It is a method of betting which has been adapted from the financial sector, where traders buy and share stocks or commodities, and in the UK it is the Financial Conduct Authority rather than the Gambling Commission which regulates spread betting.
The pay-off in spread betting comes from being more precise with predictions than bookmakers, who will create markets to try and give all the participants in an event an equal chance of winning. Handicaps are an example of bets which are designed to encourage interest on all possible outcomes even when one team or player is expected to dominate.
In a rugby union match between New Zealand and Namibia, for example, a straightforward bet on the winner of the match might not get much interest, as the odds would reflect the fact that the All Blacks would be expected to win easily. However, a bookie who had a handicap market where New Zealand were effectively given a 39.5 point deficit and Namibia a virtual 39.5 point start would hope to bring in more bets. The odds would be similar for both outcomes at close to evens, perhaps 5/6, and some customers might think that New Zealand would win by 40 points or more, while others might reckon that Namibia would not lose by as many as 39 points.
Spread betting goes beyond the concept of handicaps by offering punters the chance to earn more money, or conversely, lose more money, depending on how far outcomes veer away from what has been predicted. It is a high-stakes business and involves buying and selling shares depending on what the customer is expecting to happen. It is different to fixed odds betting on a handicap, where a bettor will decide which selection they want to back and the price is usually displayed as a fraction or decimals.
In spread betting, the bookie will give a prediction of the outcome of a market and offer two values. The difference between the two is the spread and shows the range of outcomes in which the bookmaker thinks the final result will fall. For the example of New Zealand’s rugby match against Namibia, the spread may be 37-42 in favour of the All Blacks. Punters then decide whether the bookies have got their quote right or whether they think it is too low or too high.
Customers who reckon the quote is too low would buy, which is always done at the highest value, while punters who think the quote is too high would sell, which is always done at the lower value. The amount of money won or lost depends on how much was staked and how different the winning margin was to what was predicted.
Spread betting can be applied to a wide range of markets, from the total number of games in tennis to the amount of runs a particular player will score in cricket or the time the first goal will be scored in a football match, and the prospect of securing some massive payouts for accurate betting will prove very tempting for many.
However, it is also very risky as the losses can be just as extreme as the wins, so customers need to think carefully before betting and really try to understand a market before putting down any money. It is worth considering what the worst result would be for any wager and how much should be staked, but it is still a fascinating form of betting which is likely to keep growing.