Do Gamblers Think that Teams Tank? Evidence from the NBA
13 Pages Posted: 26 Feb 2013
Date Written: April 2013
A growing body of literature indicates that sports teams face incentives to lose games at the end of the season. This incentive arises from a league's entry draft policy. We use data from betting markets to confirm the existence of tanking, or the perception of tanking, in the National Basketball Association (NBA). Results from a Seemingly Unrelated Regression (SUR) model of point spreads and point differences in NBA games indicate that betting markets believe that tanking takes place in the NBA, even though the evidence that tanking actually exists is mixed. Other NBA policy changes also affect betting market outcomes.
JEL Classification: D0, L0
Suggested Citation: Suggested Citation