Regular sportsbooks (i.e. non-exchange, they're making the market) don't necessarily want the "liquidity." At least many years ago when I was doing this profes

Regular sportsbooks (i.e. non-exchange, they're making the market) don't necessarily want the "liquidity." At least many years ago when I was doing this professionally, there were "sharp books" and "square books." The sharp books more or less operated the way you're describing. They would try to set the line as close to the true odds as possible. They knew who the sharp bettors were, and they may have limited their bets to some degree, but they would take them and adjust the lines accordingly. You have to be a very good bookmaker for this strategy to work, because every line that's a little bit off is going to get pounced on for the max bet. The square books' strategy was to keep the sharp bettors out by limiting their bets severely or kicking them out entirely. This also lets them set the lines in a way that makes them more money, because there are a number of biases recreational bettors tend to be subject to. In particular, they tend to overbet on favorites, and they tend to underappreciate the home team advantage. There's also an effect where people will tend to bet on their favorite team, and so teams from large markets get more bets than teams from small markets. By moving the line a few percent one way, they can make significantly more money on average.