Point Shaving in College Basketball: A Cautionary Tale for Forensic Economics
22 Pages Posted: 26 Jul 2007 Last revised: 29 Aug 2008
Date Written: August 25, 2008
Point shaving is the practice by favored teams of attempting to win by less than the point spread to yield profits for gamblers who bet on the underdog. Consistent with point shaving, strong favorites are anomalously likely to win by less than the spread. To distinguish between innocent and criminal explanations, we (1) exploit information in line movements and (2) isolate games without betting lines to identify games where point shaving is implausible and document similar patterns. The data are better explained by strategic efforts to maximize the probability of winning. These findings highlight the importance of indirect method design.
Keywords: pointshaving, gambling, forensic economics
JEL Classification: L83, C14
Suggested Citation: Suggested Citation