NFL betting market efficiency, divisional rivals, and profitable strategies. Issue 3 (3rd September 2019)

• Record Type: Journal Article
• Authors: Shank, Corey A.
• Is Part Of: Studies in economics and finance. Volume 36:Issue 3(2019)
• Page Start: 567
• Page End: 580
• Publication Date: 2019-09-03
• Subjects: Gambling -- Market efficiency -- Familiarity -- NFL -- Sports betting; G14 -- L83; Economics -- Periodicals; Finance -- Periodicals; 330
• DOI: 10.1108/SEF-11-2018-0354
• Languages: English
• ISSNs: 1086-7376

Abstract

Abstract : Purpose: This paper aims to examine market inefficiencies in the National Football League (NFL) betting market from the 2003 season to the 2016 season. Design/methodology/approach: The author examines the impact that division rivals and previously known determinants of inefficiencies have on the current NFL gambling market. Findings: The results show that games against division rivals have a lower chance of the home team covering the spread and the chance the game will result in an over. This result demonstrates that the sportsbooks underestimate the familiarity that teams have with each other's players, coaches and tendencies from playing each other twice per year. Moreover, using this result in conjunction with previous known inefficiencies, the author puts forth a model to test out of sample predictions. The results from these tests show profitable strategies in the point spread and totals market with a win rate of nearly 57 per cent. Originality/value: Overall, this paper demonstrates inefficiencies in the NFL betting market that future bettors may be able to take advantage of.