Close But No Cigar: Does Winning the Game Moderate or Amplify Failing to Cover the Spread in Future NFL Games

Abstract

In this paper, I examine the joint role of the previous game’s outcome with and without the spread on wagers’ preferences and outcomes in the NFL gambling market. The results show that gamblers are more likely to wager on the home team if they covered the spread in their previous game, while they are less likely to bet on the home team if the visiting team won their last game (not considering the spread). Further results show that teams are more likely to cover the spread if they covered the spread but lost their previous game. Profitable betting strategies are then put forward based on this information.

Keywords: Financial Markets, Gambling, Market Efficiency, Momentum, Sports Betting

JEL Classification: G1, G4, L83