Bettor Habits When Point Spreads and Money lines are Offered on the Same Game: The NFL

Main Article Content

Rodney Paul
Andrew Weinbach
Mark Wilson

Abstract

Bettor preferences and returns are examined in the NFL wagering market where both point spread and money line wagers are simultaneously offered.  In both markets, the balanced book hypothesis can be soundly rejected, with bettors preferring favorites.  Despite the clear difference in how a winning bet on the favorite is achieved in each market, the percentage bet on the favorite in both the point spread and money line markets correspond nearly one-to-one.  Biases are most pronounced in certain subsets of the data, where betting against favorites on both the point spread and money line are shown to reject market efficiency.

Article Details

Section
Articles
Author Biography

Rodney Paul, Syracuse University

Professor - Department of Sport Management - Syracuse UniversityPhD - Applied Economics - Clemson University 2000

References

Arrow, K. J. (1984) “Risk Allocation and Information: Some Recent Theoretical Developments.” In Collected Papers of Kenneth J. Arrow, vol. 4, The Economics of Information. Cambridge, MA: Belknap Press, Harvard University Press.

Bassett, G. W. (1981) “Point Spread versus Odds.” Journal of Political Economy, 89, 752-768.

Levitt, S. (2004) “Why are Gambling Markets Organized So Differently from Financial Markets?” The Economic Journal, 114, 223-246.

Paul, R. J., Humphreys, B. R., and Weinbach, A. P. (2014) “The Lure of the Pitcher: How the Baseball Betting Market is Influenced by Elite Starting Pitchers.” The Oxford Handbook of the Economics of Gambling. Oxford University Press, Leighton Vaughan Williams and Donald S. Siegel, editors.

Paul, R. J. and Weinbach, A. P. (2012). “Sportsbook Pricing and the Behavioral Biases of Bettors in the NHL.” Journal of Economics and Finance, 36(1), 123-135.

Paul, R. J. and Weinbach, A. P. (2011). "Bettor Biases and Price Setting by Sportsbooks in the NFL: Further Tests of the Levitt Hypothesis of Sportsbook Behavior." Applied Economics Letters, 18(2), 193-197.

Paul, R. J. and Weinbach, A. P. (2009). “Sportsbook Behavior in the NCAA Football Betting Market: Tests of the Traditional and Levitt Models of Sportsbook Behavior.” Journal of Prediction Markets 3(2) 21-37.

Paul, R. J. and Weinbach, A. P. (2008). “Does Sportsbook.com Set Pointspreads to Maximize Profits? Tests of the Levitt Model of Sportsbook Behavior.” Journal of Prediction Markets, 1(3), 209-218.

Paul, R. J. and Weinbach, A. P. (2008). “Price Setting in the NBA Gambling Market: Tests of the Levitt Model of Sportsbook Behavior.” International Journal of Sport Finance, 3, 3, 2-18.

Woodland, B. M. and Woodland, L.M. (1991) “The Effects of Risk Aversion on Wagering: Point Spread versus Odds.” Journal of Political Economy, 99(3), 638-653.