NFL Betting Biases, Profitable Strategies, and the Wisdom of the Crowd

25 Pages Posted: 16 Dec 2018

Date Written: August 26, 2018

Abstract

This paper finds that betting biases in the NFL market go beyond preferring to bet on the favorite team and the over. The results show that as more bettors place wagers, the percentage of wagers on the favorite team increases. Additionally, bettors have a preference to bet against the line movement to receive better betting odds in the point spread market. Moreover, bettors prefer betting on the favorite when the away team has lost recent games and on the over when the home team has been covering the over in recent games. Furthermore, bettors have a nonlinear preference in the point spread betting, as they are less likely to wager on the favorite when the spread is small or large. Finally, economically profitable strategies are put forth based upon the percentage of bettors betting on the favorite or over by using a contrarian strategy when 50% to 60% of bettors place the same wager. These results have important implications as they can be used by the sportsbook to create betting lines to maximize profit.

Keywords: Betting Markets, Decision Making, Biases, Efficient Markets, Wisdom of the Crowd, Hot Hand

JEL Classification: D7, G14, L83

Suggested Citation

Shank, Corey, NFL Betting Biases, Profitable Strategies, and the Wisdom of the Crowd (August 26, 2018). Available at SSRN: https://ssrn.com/abstract=3289715 or http://dx.doi.org/10.2139/ssrn.3289715

Corey Shank (Contact Author)

Miami University ( email )

Oxford, OH 45056
United States

HOME PAGE: http://coreyshank.com

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