SportsInsights.com Article – Academic Research on Football

In a previous article, SportsInsights.com summarized some of the academic research performed on baseball and hockey – as well as horse racing.  In this article, we summarize research on football – both professional and college football. 

The information below is gathered from various sources and journals that are not affiliated with SportsInsights.com.  However, these academic sources lead to the same conclusions as SportsInsights.com’s independent research:  that there is a bias towards betting on underdogs and unders; and that “Betting Against the Public” can lead to value.  The information on this site is for entertainment and educational purposes only.  Use of this information in violation of any federal, state, or local laws is prohibited.

Football Research

• Home Dogs: In pro football, Home Dogs have proven to be a good way to go. Borghesi’s well-researched paper (2003) shows that there is, indeed, a bias towards Home Dogs – particularly, late in the season (namely, weeks 15-18), and into the playoffs. Various reasons are given for this bias, including: (a) teams tiring as the season wears on (thus increasing home field advantage), and (b) increased levels of public betting as the season winds down and playoffs begin, thereby magnifying inefficiencies and biases.

• Unders: Previous research and articles have highlighted a bias to the “Under” when looking at Totals in sports betting. Pro football is no different. Overall, there is a slight bias towards the Under, with a greater bias (enough to earn a profit) when the line is 5-7 points above the average Over/Under Line of 40.3 in pro football (Paul and Weinbach, 2002).

• College Football Big Dogs: Similar to other academic papers, this body of research found college football to be fairly efficient – but DID agree that there are slight biases. Again, the researchers found Home Dogs to have some value. Large underdogs were found to be profitable. In particular, the authors found there to be a slight bias for underdogs of more than 7 points – and dogs of more than 28 points to be profitable (Paul, Weinbach and Weinbach, 2003).

• Cold Weather - was studied as a factor in establishing point spreads. Statistical analyses and regressions conclude that weather, as a parameter (warm-weather teams visiting a cold weather team during cold weather), is already factored into the point spread (Borghesi, 2003).

• National Focus and Home Field: Several sources have documented the magnification of biases during games of national focus, such as playoff games or Monday Night Football. The reasoning is that with more of the public watching, an increasing amount of public money is bet on the game – thus increasing the edge for the Sharp bettors. Some of our SportsInsights.com Members have pointed out that our strategy “Betting Against the Public” (Link) works particularly well during the playoffs or nationally televised games – in most sports. One article of interest (Vergin and Sosik, 1999) highlights “home field advantage” as a bias that is exaggerated in big games. In games of national focus, the authors say to take the Home team (even more so if it’s a Home Dog). They note that Home Dogs are rare in the playoffs, since the better team usually gets home field advantage during the playoffs.

Market Efficiency

Various authors have tackled the issue of whether or not the sports marketplace is efficient.  The general conclusion is that certain biases exist.  Some professors claim that profits can be earned in the markets while others claim that although biases exist – they are barely enough to make up for the vig.

Borghesi (2003) is one author who believes that significant mis-pricings occur in the NFL sports betting market.  He states, “Market inefficiencies persist because participants discount old information and are slow to process new information.”  Gouldey (2005) says, “Statistically significant evidence is found that the market is not weak-form efficient and that speculative profits (after transaction costs) can be earned using the information set based only on quoted betting and realized point spreads.”  On the other hand, another set of authors (Sauer, Brajer, Ferris, and Marr, 1988) “present a variety of evidence that contradicts (the) assertion that the betting market for NFL games is inefficient.” 

Conclusion

There’s a famous saying, “The only constant is change.”  This can be said about the sports marketplace and financial markets in general.  If excess returns can be earned in the marketplace, market participants will enter the marketplace and eventually drive the bias away. 

At SportsInsights.com, we strive to give you the real, honest scoop.  Sports betting is not easy.  Most people lose money.  However, if you take a serious, professional view of sports investing, you should be able to profit from the sports marketplace.  We hope that you will use the tools that SportsInsights.com has put together – and that they will help you to a profitable and exciting football season.   

Disclaimer

We do not guarantee that the trends and biases academic researchers and SportsInsights.com have found will continue to exist.  It is impossible to predict the future.  Any serious academic research in the field of “market efficiencies” recognizes that inefficiencies may disappear over time.  Once inefficiencies are discovered, it is only a matter of time before the market corrects itself.  We do not guarantee our data is error-free.  However, we at SportsInsights.com have tried our best to make sure every score and percentage is correct.

References

Borghesi, Richard, 2003, Price Predictability: Insight from the NFL Point Spread Market, Department of Finance, Insurance, and Real Estate, University of Florida

Gouldey, Bruce, 2005, Is the Market for Wagering on NFL Games Weak-Form Efficient?, Department of Finance and Economics, Harry F. Byrd, Jr. School of Business, Shenandoah University

Paul, Rodney and Weinbach, Andrew, 2002, Market Efficiency and a Profitable Betting Rule, Journal of Sports Economics (August 2002), 256-263

Paul, Rodney; Weinbach, Andrew; and Weinbach, Chris, 2003, Fair Bets and Profitability in College Football Gambling, Journal of Economics and Finance (Summer 2003), 27(2)

Sauer, Raymond; Brajer, Vic; Ferris, Stephen; and Marr, Wayne, 1988, Hold Your Bets: Another Look at the Efficiency of the Gambling Market for National Football League Games, The Journal of Political Economy, Volume 96, 1 (February 1988), 206-213

Vergin, Roger and Sosik, John, 1999, No Place Like Home: An Examination of the Home Field Advantage in Gambling Strategies in NFL Football, Journal of Economics and Business (1999), 51 (January-February), 21-31