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If the spread is set at +7, the underdog must either win the game outright or lose by fewer than seven points in order to cover. For the favorite to cover, they must win by more than seven points.
Betting odds are the ratio between the amount staked by the bookies and the bettor, so 7/1 means the bookies stake seven times the amount the bettor has wagered. If the bettor wins; their predicted outcome materialises; they will take seven times their bet from the bookie (in this case).