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Is the NFL betting market still inefficient?

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  • Corey A. Shank

    (Oklahoma State University)

Abstract

In this paper, I examine market efficiency in the National Football League betting market. In the point spread market, sportsbooks appear to underestimate the abilities of the home team as they are more likely to cover the spread when they are a substantial underdogs and when the home team has not covered the spread in its previous games. In the totals market, games are more likely to cover the over when the closing line is small or large showing a quadratic relationship to game outcomes and when the home team has covered the over in its previous games. Overall, the results show that both the point spread and totals market are statistically inefficient.

Suggested Citation

  • Corey A. Shank, 2018. "Is the NFL betting market still inefficient?," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 42(4), pages 818-827, October.
    • Handle: RePEc:spr:jecfin:v:42:y:2018:i:4:d:10.1007_s12197-018-9431-4
    DOI: 10.1007/s12197-018-9431-4
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    References listed on IDEAS

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    Cited by:

    1. Durand, Robert B. & Patterson, Fernando M. & Shank, Corey A., 2021. "Behavioral biases in the NFL gambling market: Overreaction to news and the recency bias," Journal of Behavioral and Experimental Finance, Elsevier, vol. 31(C).
    2. Justin Cox & Adam L. Schwartz & Bonnie F. Van Ness & Robert A. Van Ness, 2021. "The Predictive Power of College Football Spreads: Regular Season Versus Bowl Games," Journal of Sports Economics, , vol. 22(3), pages 251-273, April.
    3. Shank, Corey A., 2022. "Information asymmetry in the NFL gambling market: Inside information versus informed bettors," Journal of Behavioral and Experimental Finance, Elsevier, vol. 36(C).
    4. Corey A. Shank, 2019. "NFL betting market efficiency, divisional rivals, and profitable strategies," Studies in Economics and Finance, Emerald Group Publishing Limited, vol. 36(3), pages 567-580, September.
    5. Vandenbruaene, Jonas & De Ceuster, Marc & Annaert, Jan, 2023. "Does time series momentum also exist outside traditional financial markets? Near-laboratory evidence from sports betting," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 104(C).
    6. Daniel C. Hickman, 2020. "Efficiency in the madness? examining the betting market for the ncaa men’s basketball tournament," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 44(3), pages 611-626, July.
    7. Nofsinger, John R. & Shank, Corey A., 2023. "Momentum trading in the NFL gambling market," Finance Research Letters, Elsevier, vol. 55(PB).

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    More about this item

    Keywords

    Gambling; Market efficiency; NFL; Sports betting;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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