Via The Sports Economist comes a report that Las Vegas bookmakers are seeing big losses on NFL games this year owing to the large number of very bad teams and the difficulty of getting the point spreads right.

The Golden Nugget sports book, for instance, opened with St. Louis getting 12.5 points (the half to help with ties). That way, if you bet the Rams and the actual game ended 21-10 Indy, you’d win the bet with a score of 22.5-21 St. Louis.

A betting line is fluid though and will correct itself as money pours in for the favorite or underdog. Despite the Rams getting all those points, at home no less, the money kept going to Indy. The line reacted by moving all the way to 14 points at kickoff.

Still 90% of the money was on the Colts at game time and the Colts won 42-6.  Perhaps the problem is that there is a large variance in the market’s estimate of the likely point spread.  The bookmaker has to make a good guess the first time becuase too much adjustment of the line allows arbitrage.  And a bad guess can be costly.