Definition of Exposure

What does the term "exposure" mean in the world of sports betting? What is the definition of the term exposure as it applies to the world of sports betting?

"Exposure" refers to the total amount of money that a sports book stands to lose from a sports event.

Sports books set their lines so that their exposure is limited regardless of the outcome of an event. In a perfect world, the losing bets would pay off the winning bets and the sports book would keep the "vigorish".

This is not a perfect world, however, and sports books can sometimes find themselves getting pounded on one side, which leaves them open to a big loss.

For instance, let's say that a game between the New England Patriots and Seattle Seahawks is a coin flip, and the sports book has had $4 million bet on both sides.

Now let's say that Floyd Mayweather walks up to the sports book and bets $3 million on the Patriots. Now, the book will adjust its line, though they will still have exposure if the Patriots end up winning. If Mayweather bets just before the game, the sports book won't have the opportunity to balance out their bets (they do, however, have the option of reducing the size of the wager).