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SportsInsights.com Article
Article # 5: NFL (2003 and 2004 Results)
Previous
SportsInsights.com articles applied “Bet Against the Public” and
“Smart Money” methods to the NBA, NCAA Basketball and MLB.
Here, we look at how “Betting Against the Public” performed
over the past two NFL seasons. In addition, we review the
performance of an NFL “trend” published in a research paper
two years ago. 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.
Market Inefficiencies Over Time: The NFL “Home Dog”
In December
2002, University of Chicago professor Steven Levitt
published an article, “How do Markets Function? An Empirical
Analysis of Gambling on the NFL.” Levitt studied betting
tendencies – and not surprisingly, found that the public
tends to bet on favorites.
More
interestingly, his work highlighted a bias that some NFL
bettors try to exploit: the “Home Dog.” Levitt’s research
showed that the Home Dog was the public’s least favorite
bet. His work also showed that oftentimes, what the public
doesn’t like, performs well. The Home Dog produced
favorable results: more than a 57% winning percentage.
SportsInsights updated this research and discovered that
Home Dogs performed at a more mediocre 51% over the past two
seasons. In previous articles, SportsInsights stressed that
market inefficiencies may fade over time. In the best-case
scenario, we know that certain systems or “trends” will have
both good and bad periods.
Fading the
Public in the NFL
The NFL
“Home Dog” research showed that inefficiencies exist – and
that they often reflect public biases. One key positive
about SportsInsight’s underlying philosophy and theme is
that we compile data and information that allow members to
directly “Bet Against the Public.” Indeed,
over the past two NFL seasons, fading the public when the
public exceeded one side by 70% -- yielded winners slightly
more than 55% of the time. Not bad for a fairly
simple system that is available to SportsInsights
members.
Taking this
one step further, we can obtain even better results.
SportsInsights often emphasizes “Smart Money” methods – as
indicators for where the “smart money” has landed. Smart
Money methods fade the public, especially when the line
moves against what would be expected, based on the Public
percentage figures.
Applying the Smart Money method to the NFL over the past two
seasons would have achieved a winning percentage of over 60%
(fade the public at the 50% level with a small line move of
0.5 or 1.0).
Handicapping the NFL
The NFL
does not generate the large number of games that other
sports such as the NBA and MLB generate. The limited number
of games makes it more difficult to obtain “statistically
significant” results. However, the moral of the story is
that Betting Against the Public DOES indeed
produce an edge – and in fact, works consistently in
every sport we have studied. Table 1
summarizes the “Bet Against the Public” results that we have
obtained in previous articles for other major sports.
Table 1: Betting Against
the Public
|
|
Public % Threshold |
Fade
Winning Pct |
Approx. # Games in Database |
|
NFL |
70% |
55% |
500 |
|
MLB |
70% |
55%* |
4,000 |
|
NBA |
77% |
55% |
1,700 |
* For MLB, Winning Pct is normalized, or adjusted, for
money-line betting.
At
SportsInsights we provide several valuable tools that can
help the sports investor achieve an edge. Our members have
access to public betting percentages, graphs of line moves,
“square” info, line histories from various books – and other
useful information.
As with any
sport, but particularly with the NFL, it might pay to
combine these “Bet Against the Public” results with other
handicapping tools. SportsInsights encourages an exchange
of ideas on our forums – as well as “group research.”
Already this year, some forum contributors have mentioned
“turnovers” and other ideas/statistics to improve NFL
results. Please contribute to our SportsInsights community
by sharing your ideas and thoughts.
Disclaimer
We do not
guarantee that the trends and biases we’ve 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
or fade 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’ve
tried our best to make sure every score and percentage is
correct.
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