What is spread betting?

It's big overseas and is just starting to make a mark here... but it's not like fixed odds betting that you might be used to.How does spread betting work?

Spread betting

You may never have heard of spread betting on sports. But you probably will soon thanks to the recent launch of Pointsbet in Australia.

So how is it different and what do you need to know?

The key differences

Spread betting gives you an opportunity to bet on a number of outcomes that will be quite familiar.  Taking the most simple example, backing your AFL or NRL team at the line.

With a regular fixed odds bet, you bet one side of the line or the other: you’re either right or wrong, and you either win or lose.

Spread betting allows you to take a similar position, however the amount you win or lose depends not just on whether you’re right or wrong, but by how much.

Spread betting example…

In Sunday’s Fremantle vs Carlton game in Perth, you might have backed the Dockers at the line, having $100 on Fremantle -22.5 at $1.95.  This is a simple fixed odds bet: If the Dockers won by 23 points or more, you collect $195 (winning $95).  If the Dockers fall short of that winning margin (or lose the game outright), you lose your $100 stake.  It’s a black-and-white equation.

Taking Fremantle -22 when spread betting however is quite different.  There are no ‘odds’ in the traditional sense.  You input a stake (for example $10), and that is multiplied by how far you’re right or wrong when calculating your win or loss:

  1. Your position is Fremantle will win by at least 22 points
  2. Your stake is $10 per point
  3. Fremantle in fact won by 35 points… therefore your bet won by 13 points.
  4. Your winnings are your stake multiplied by that margin: $10 x 13 points = $130.

If you lose your bet, it works the other way.  Let’s say Fremantle only won by 8 points.  You’ve fallen 14 points short, which is multiplied by your stake of $10.  You’d lose $140.

Key considerations

  • Spread betting tends to be aimed at the educated punter who backs their judgment: the punter who puts in a lot of research and is confident in their position.  If they think a line quoted is way off, obviously the scope for winning is big.
  • Equally, the scope for losing is big: your stake multiplied by how many points you’re out by.
  • So the early advice is clear: start small!  Stakes of $1 are probably not a bad idea while you’re getting a feel for spread betting.  In our Fremantle vs Carlton examples above, you would have won $13 or lost $14.
  • To help with this, spread betting agencies usually have “stop loss” limits: you can place a max limit on how much you’ll potentially lose.

A New Player

PointsBet have recently landed as Australia’s first dedicated spread betting agency.  They have a mountain of sports betting markets every day, including AFL, NRL, cricket, NBA, NFL and soccer.

Stay tuned for the Betting 360 podcast tomorrow when we catch up with PointsBet about what they have to offer for punters.