The Secrets of House Edge

The average sportsbook in 2024 profited around $10 for every $100 dollars bet. That means the average bettor lost 10% of every dollar they bet. Yeesh!

In the last year, my betting strategies won me $9 for every $100 I bet. Today I’ll teach you how this works. I’ll tell you which bets the book LOVES seeing you make, and how I choose bet types that keep the house edge low.

I’m trying to be the Robin Hood of gambling, taking from the house and giving to the bettors — so I need you to know this:

If you want to be a winning bettor, start by playing against a low house edge.

We’ll use this knowledge to make some big season-long (Futures) NFL bets! Skip to the bottom if you want to bet first, learn second, and feel free to speed through the math if that ain’t your thing ;).

Calculating House Edge

A standard -110 spread bet (the most common bet type) has a house edge of 4.55%. 

Here’s the math: 

• You and I each bet $55 on opposite sides of the same game. Combined, we risk $110.

• The winner gets $105 back - their $55 wager plus $50 in winnings.

• The book keeps $5. 

• Divide their $5 profit by the $110 risked, and 5/110 = 4.55%.

So for every bet of this type the book ends up with 4.55% of the money wagered over time. This begs the question: how often would someone need to be right in order to be a winner against this edge?

• Let’s say I make 1,000 bets of $110, risking $110,000 total. 

• If I win 524 bets and lose 476, the winning bets will return $52,400 in winnings plus the $57,640 I’ve risked. That equals $110,040 all together. 

• I’ve made a $40 profit by winning 52.4% of the time, so that’s my magic number to be above water.

4.55% house edge isn’t the worst to battle against, but if you wanted to win $5,000 instead of $40, you’d need to hit at least 54.8% winners.

To get to $10,000 profit, instead of $40, you’d have to win 57.2%. That’s not easy, folks.

House Edge in Futures Bets

Let’s now look at the house edge in different types of futures bets. 

A futures bet selects the outcome of a tournament, season or award determined in the future (hence the name). “Who will win the upcoming Super Bowl?”, or “Who will pass for the most yards this NFL season?”.

Determining the house edge in a futures market is more complex than the case above. We’ll use the upcoming presidential election as an example.

Let’s say a sportsbook offered the following odds on who will be our next president:

Every money line (like those above), sets an implied percentage chance that an outcome will occur. You can see some examples of how this works here, and I include an easy excel formula to calculate this yourself in the appendix below.

Returning to our example, we’d convert those odds to implied percentage likelihood of the event, and see the following:

There’s a formula to convert implied percentage to house edge in the appendix, but the book will take 8.53% of all dollars in this case. The house edge in this market is almost double a typical spread bet. 

Here’s the crazy part: this is common! House edge in many popular futures markets is between 15% and 25%, or three to five times higher than a spread bet.

Draftkings market on “Who will win the 2025 Super Bowl?” sits at a house edge above 18% today.

You gotta be absurdly good at seeing the future to beat those odds.

So does this mean we can never bet futures? NO! Let’s take advantage of understanding house edge, and then make some bets.

First, by knowing how to assess house edge in any market, we’ll seek out markets that are easier to profit in. This is an easy resource if you want to calculate house edge in a market fast. 

Second, we’ll build our own multi-book markets by finding the best futures lines across all books we have access to, and limit our bets to markets with a combined house edge of less than 4%, and sometimes even less than 2%.

Let’s apply this concept to the futures market “Win the NFC East in the 2024 Season”. 

If we start by looking only at FanDuel, and apply the methods we discussed above, we see the following:

Fan Duel NFC East Odds

The house edge of 8.18% is not compelling. We can do better.

If we use all legal sportsbooks in New York state, and choose the best line from each, we can build the following multi-book market:

Combined NFC East Odds

Wow — we reduced the House Edge down from FanDuel’s 8.18% to 3%. Now this market is much softer to bet into! That’s some Robin Hood stuff.

This shows the benefit of having access to as many sportsbooks as possible to find the best lines. Juice Reel is my go-to app for comparing lines in markets like this one.

Bet of the Week

Let’s make some bets. I love betting season long futures, like division winners, because the fun is spread over 18 weeks and I use techniques like the above to boost my win rate.

One relevant, and crazy statistic: in 19 of the past 21 years, an NFL team has gone from worst to first in their division from one season to the next.

Here are last year’s divisional cellar dwellers, and their odds to win their division this year (ranked most likely to least):

Using some data from Juice Reel, I’ll include house edge on the relevant market to find some value:

We have three markets where we’re giving up 3.04% or less to consider firing in!

Browsing the other teams, I’m comfortable avoiding: 

(1) the Bears based on public fervor over Caleb Williams and the Hard Knocks hype — too public,

(2) the Titans given the departure of the great Mike Vrabel, and

(3) the Cardinals given how competitive that division is and Kyler Murray’s injury risk.

I’ll monitor the AFC East and AFC West to see if the odds get more friendly. If I really wanted to bet on the Patriots, I’d explore the house edge in other, related markets (season win total market, make playoffs market, etc.).

Given the fact the Bengals were the first NFL team in history to finish last in their division with a winning record, they have the shortest odds by a long shot. I feel good about making a bet here at +165 or better.

I will also make smaller bets on the Panthers at +1200 and the Commanders at +1200 (or better) given the potential improved quarterback play in both cases and the chance to win a lot with a small wager.

So here are the picks:

I used the approach above to win on a Texans division winner bet last season at +1100 when they went worst-to-first. Because of Juice Reel, easy to keep receipts:

Next week, more NFL bets, more learning, and my favorite feature in Juice Reel. Let's go!

Appendix:

In the Presidential Election example, to calculate house edge from implied win percentages, we’d take the following steps:

• Add 58.33% + 50% + 1% = 109.33%

• Subtract 100% from 109.33%, which is 9.33%.

• Divide 9.33% by 109.33% = 8.53%

To turn a money line into a percentage in excel, put your money line in cell A1 and use this formula in another cell: 

=IF(A1>0,1/(A1/100+1),1/(1+100/ABS(A1)))