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Totals Markets as Evidence Against Widespread Point Shaving

Author

Listed:
  • Richard Borghesi
  • Rodney J. Paul

    (St. Bonaventure University)

  • Andrew P. Weinbach

    (Coastal Carolina University)

Abstract

Wolfers (2006) suggests that NCAA basketball is marred by widespread gambling corruption. We examine totals wagers in a variety of sports betting markets to determine whether observed outcomes are symmetric around closing lines, an important assumption Wolfers makes in his analysis. Our results show that totals wagers result in just under outcomes more frequently than they result in just over outcomes. This occurs because gamblers strongly prefer to take the over in totals betting, and profit-seeking bookmakers capitalize by shading totals lines upwards. Likewise, prior work shows that gamblers in point spread markets strongly prefer to bet on favorites, so it is not surprising that win/no cover outcomes occur more frequently that do win/cover outcomes. We conclude that the critical but erroneous symmetric-distribution assumption is responsible for creating the illusion of widespread point shaving.

Suggested Citation

  • Richard Borghesi & Rodney J. Paul & Andrew P. Weinbach, 2010. "Totals Markets as Evidence Against Widespread Point Shaving," Journal of Prediction Markets, University of Buckingham Press, vol. 4(2), pages 15-22, September.
    • Handle: RePEc:buc:jpredm:v:4:y:2010:i:2:p:15-22
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    Citations

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    Cited by:

    1. Ryan Rodenberg, 2013. "Employee Discipline And Basketball Referees: A Prediction Market Approach," Journal of Prediction Markets, University of Buckingham Press, vol. 7(2), pages 43-54.
    2. Berkowitz, Jason P. & Depken II, Craig A. & Gandar, John M., 2018. "Market evidence against widespread point shaving in college basketball," Journal of Economic Behavior & Organization, Elsevier, vol. 153(C), pages 283-292.
    3. Sanders, Shane, 2022. "Point shaving in NCAA Men’s Basketball: Behavioral finance, scale, and deterrence," Journal of Behavioral and Experimental Finance, Elsevier, vol. 34(C).
    4. Greg Durham & Mukunthan Santhanakrishnan, 2012. "Point-Spread Wagering Markets' Analogue to Realized Return in Financial Markets," Journal of Sports Economics, , vol. 13(5), pages 554-566, October.

    More about this item

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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