Handicap betting comes into its own when punters are presented with an uneven sporting contest where the favourite is highly unlikely to win and there seems little chance of victory for the underdog.
In these instances, it can be made more competitive by introducing a handicap where the underdogs are given a head start.
This is particularly popular in high-scoring games such as basketball, American football and both codes of rugby, although they are also used in football too.
This is referred to as betting the spread in America, which should not be confused with spread betting in the UK.
How Handicap Betting Works
The basic idea of handicap betting is that one team gains a head start so that the odds become even.
So, a strong football team could start a game with a -1 handicap meaning that they would have to win by two goals or more for the bet to be a winner, while an underdog could be given a +1- goal handicap, which means their bet would be a winner if the game was a draw.
Different sports have different rules regarding handicap draws. Some will count handicap draws as a loser, as is common with rugby union where odds on the handicap draw are often available, while stakes will tend to be returned if an American football game ended in a handicap draw.
Simple Example in Football
Here is an example of how a handicap bet would work in a potentially uneven football match between Manchester City and Burnley
City would be highly expected to win, but a handicap could be set at -2, meaning they would have to win by three goals or more for the bet to be a winner.
Burnley meanwhile, would be offered a handicap of +2 which would result in the bet being a winner if they won the game, drew or lost by one goal.
There would also be the opportunity to back the handicap draw, whether it would be for City to win by two goals or Burnley to lose by two goals.
Asian Handicap vs European Handicap
There are two types of handicap betting, European and Asian handicap betting
European handicap betting can be easier to understand as it includes win, draw and loss options, while Asian handicap betting eliminates draws by the use of fractional goals.
For instance, in an Asian handicap bet on our above example, Manchester City may be offered with a -1.5 mark, meaning that the bet would be a winner if they won by two goals but a loser if they won by just one.
Their reduced variance has resulted in these bets being popular in Asia, but European handicaps can be easier to understand for beginners.
Pros and Cons of Handicap Betting
Pros
The main pros for handicap betting are that it is a good way to get a bigger price on backing favourites, while they are good for getting behind an underdog if you think they can do well in a match without necessarily winning.
It provides a tactical depth to sports betting and levels the field for what appear to be lopsided matches.
Cons
Handicap betting can be confusing at first and some handicap draws can be frustrating, while it will take time to get used to the scenarios of Asian handicap betting and that could require a lot of explanation and the use of a calculator.