What is Sports Bet Hedging?

What Does “Hedge Your Bets” Mean?

To “hedge your bets” means to place multiple bets on different angles of the same competition, thereby reducing the overall risk. By placing wagers on both or all possible outcomes, the bettor is guaranteed to win something. Depending on the lines, they may lose a little more than they win, or win a little more than they lose. Think of it as insurance, wherein the profit potential is reduced to minimize the severity of potential loss.

Bet hedging is not a strategy or a method of making more valuable picks. Its sole purpose is to produce smaller risk to your bankroll. However, in some cases, you can actually guarantee a profit.

Also note that hedge betting is not the same as arbitrage betting. In arbitrage, the goal is always to guarantee a profit. Such opportunities are extremely rare. You can learn more about that here:

• Arbitrage is Real – Shop the Lines!

How Bet Hedging Works

Sports bet hedging is all about timing and situational opportunity. It’s not something you’d engage in during everyday sports betting activities. It is more commonly used to mitigate risk when you decide one of your existing bets has become too risky.

For example, let’s say you’ve bet the opening line of -140 on the Raiders to beat the Cowboys. They were favored pretty strongly, due to a fantastic passer rating. Then, a day before the game, you find out their quarterback has the flu. He may or may not play, and if he does, he’s not going to be up to par. Suddenly, you’re not so confident the Raiders will win.

To mitigate the risk, you can place a separate, equal bet on the Cowboys. By doing so, you can minimize the risk of losing money on either side. If the favorite wins, you lose a little. If the underdog wins, you win a little. No matter what happens, you’re protecting your money from a potentially bigger loss.

As I said, this is the more common practice in hedge betting. But sometimes situations come along where you can hedge your bets, and guarantee a profit.

Example of how hedging betting can guarantee a win.

In February 2021, Super Bowl LV saw the NFC Champion Tampa Bay Buccaneers take on the AFC Champion Kansas City Chiefs. Tampa’s odds to win the Super Bowl, prior to the start of the season, were 55 to 1. When Tom Brady signed on, they jumped to 16 to 1. And when his favorite receiving tight end, Rob Gronkowski, joined the team, the Bucs odds began looking pretty good at 9 to 1. By the time Super Bowl day rolled around, however, Kansas City was considered a 3-point favorite to win.

Anyone who had placed a bet on Tampa Bay to win it all prior to the start of the season was probably getting a little worried. At 9 to 1 odds, a $100 bet would return $1,000; more for those who got in sooner. The smartest among them knew that they could guarantee a profit by taking action on the Chiefs to win the Super Bowl.

A week prior to kick-off, most sportsbooks had the KC moneyline at -175 to win. Thus, placing a bet of $175 on the Chiefs would win $100 – the same amount our example TB-backers above have riding on the Bucs victory. So, the bettors could place $175 on the Chiefs, eliminating all risk, or they could bet more than $175, guaranteeing a profit. By doubling the bet and dropping $350 on Kansas City to win, one of two things will happen:

Scenario A: Total bet on both outcomes = $450. The Chiefs win, paying $200 (plus $350 bet returned), but losing $100 bet on Tampa Bay. Net Profit = +$100.

Scenario B: Total bet on both outcomes = $450. The Bucs win, paying $900 on the original bet (plus $100 bet returned), but losing $350 on the Chiefs bet. Net Profit = +$550.

Either way it’s a win. Easy money! Pro tip – always take the guaranteed money!

Is Sports Hedging Legal?

I know, it sounds just a bit too good to be true, but I assure you sports bet hedging is 100% legal. Let’s remember, most sports bettors are recreational gamblers who don’t put nearly so much thought into their betting strategies anyway. Sportsbook operators may not appreciate their bigger customers doing it, but that doesn’t make it wrong. Quite frankly, it stands to benefit bookies as much as it does their customers.

Sportsbooks are the biggest hedge bettors of them all. When they shift the lines, they are hedging their bets. Each time one side of an event is getting the majority of the action, they shift the lines to encourage customers to place bets on the other side. They do this to balance their books as much as possible, thereby minimizing their own risk. And when they balance it perfectly, the standard 10% juice they charge on odds guarantees them a profit.

Hedge Betting Advice and Tips

Sports bet hedging isn’t a front-line strategy. It’s more of a back-pocket tactic. If you’re making smart decisions to begin with, you won’t find too many opportunities to use it, but you should always remember it’s there when you need it.

Only shop the lines for a hedge when you feel it’s necessary. Don’t do it just because you’re getting nervous on game day. If you have every reason to believe your initial bet was a good one, then there’s no reason to hedge your bet. You’re only diminishing its value. If you’re shopping the lines at this point, it should only be for arbitrage opportunities (guaranteed profits), not risk management.

The most important element in hedging is accuracy. Double check your math every time. Factor in all stakes, tallying the results of all possible outcomes. So long as your calculations are correct, you can take full advantage of this risk management technique, if not find unique ways to guarantee yourself a profit.