Why sportsbooks move lines

Line moves are made at sportsbooks for much the same reason that share prices change in the stock market: To balance supply and demand.

• Remember that sportsbooks make their money by withholding a small commission on winning wagers.
   
• Example: If Player A bets on Team A -4, risking the standard $110 to win $100 and Player B bets $100 to win $110 on Team B +4, then the sportsbook makes $10 regardless of the outcome, as long as the final score isn't Team A by 4 points (in which case both wagers are pushed and nobody makes money).
   
• However, action is rarely perfectly balanced at sportsbooks, so lines are moved to attract bettors to the side where the house needs more money to be placed, and away from the side where the house has too much action.
   
• Question: Why don't sportsbooks just keep moving the line until the action is balanced? Answer: There is a risk to the sportsbook every time a line is moved.
   
• Example: There is $110 on Team A -4, so the house moves the line to -4.5 to attract action on Team B. Someone bets $110 on Team B +4.5 so the action is balanced. But if the final score is Team A -4, the player who bet on Team A pushes while the player who bet on Team B wins and collects $100. The house is "sided" and loses $100.
   
• Example: There is $110 on Team A -3.5, so the house moves the line to -4 to attract action on Team B. At -4, $110 more comes in on Team A so the line moves again to -4.5. Someone bets on Team B +4.5 for $220 so the action is balanced. But if the final score is Team A -4, the player who bet on Team A -3.5 wins $100, the player who bet at -4 pushes, while the player who bet on Team B wins and collects $200. The house is "middled" and loses $300.
   
• It is the risk of getting sided or middled that keeps books from moving lines, and it is the risk of having a position on a losing team that forces them to move the line.
   
• It is a combination of the sportsbook's risk tolerance (i.e. how much of a vested interest it is willing to take on a game) and wagering action that drives line moves.