Point Shaving in College Basketball: A Cautionary Tale for Forensic Economics

22 Pages Posted: 26 Jul 2007 Last revised: 29 Aug 2008

Steven L. Heston

University of Maryland - Department of Finance

Dan Bernhardt

University of Illinois at Urbana-Champaign - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: August 25, 2008

Abstract

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

Heston, Steven L. and Bernhardt, Dan, Point Shaving in College Basketball: A Cautionary Tale for Forensic Economics (August 25, 2008). Available at SSRN: https://ssrn.com/abstract=1002691 or http://dx.doi.org/10.2139/ssrn.1002691

Steven L. Heston

University of Maryland - Department of Finance ( email )

Robert H. Smith School of Business
Van Munching Hall
College Park, MD 20742
United States

Dan Bernhardt (Contact Author)

University of Illinois at Urbana-Champaign - Department of Economics ( email )

1206 South Sixth Street
Champaign, IL 61820
United States
217-244-5708 (Phone)

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