Gambling 101: What is Exposure?

Our Gambling 101 series continues with an explanation of the betting term “exposure”. What does exposure mean to bookmakers and bettors, plus how does it affect the odds?

While the term can be applied to bettors and bookmakers alike, exposure is most commonly associated with sportsbooks. From a player’s perspective, exposure refers to any amount of money used to place a bet. For example, if a bettor wagers $100 on an NFL game, their bankroll is exposed to losing the $100 invested on that contest. Bookmakers face unwanted risk if they take in more money on one side of a betting option than the amount wagered on the other side.

How Does Bookmaker Exposure Affect Betting Odds?

If bookmakers lived in a perfect world – the point spreads and game totals they post would draw equal money on both sides. If a sportsbook takes in $11,000 on each side of odds tagged with (-110) juice, they have zero exposure. The bookmaker also earns a guaranteed $1,000 risk-free profit. If a favorite draws in $11,000 worth of bets, and the underdog side only has $5,500 bet on it, the bookmaker is exposed to a $4,500 loss if the chalk side wins the contest.

Bookmakers have two primary tools to help limit their exposure. If a contest is being wagered on heavily, and a sportsbook faces too much exposure, they may circle the game. That drastically reduces betting limits on the match and will cap the risk at a lower level. Adjusting betting odds, and/or juice prices, is the second tool. In the example below, FanDuel reduced their UNDER option exposure by changing the juice in an attempt to draw in money on the OVER.

NFL Odds on May 31, 2020:

NFL Odds on June 4, 2020:

How Can Bettors Limit Bankroll Exposure?

Setting daily, weekly and monthly spending limits helps players limit their exposure. Recreational bettors are wise to never bet more than 10% of their bankroll on any single day. Players can also reduce risk by placing hedge bets on active wagers. With the odds below, $122 is bet on the Cowboys (-122) and the return is $100 on a winning ticket. However, a flu bug is spreading amongst key Dallas players leading up to the game. This is a good time for a hedge.

To reduce exposure - place a $100 bet on the Rams (+104) moneyline. Bettors break even if Dallas wins and the potential risk is reduced from $122 to $18 if Los Angeles wins. Hedging parlay bets, which are alive with one leg still active, also helps limit exposure. Players can wager on the opposite side, to cover the initial investment, and still earn a profit if the parlay ticket wins. Weigh potential exposure and take advantage of live betting to reduce it when necessary.

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