2016 NBA Playoffs: Buying Low After a Blowout Loss
Over the past week, we have utilized our Bet Labs software to uncover some of the top betting strategies during the NBA Playoffs. For the most part, we have highlighted how bettors can extract value by employing a contrarian strategy. That includes consistently defying conventional logic by betting against the public and taking teams after a loss, but there are many other ways that bettors can benefit from public sentiment.
Square bettors are greatly influenced by recent events, and that tendency is magnified during the postseason where seemingly every play is viewed under a microscope. One poor performance can cause bettors to jump off a team’s bandwagon and completely change their outlook on the series. Sportsbooks understand this and shade their lines accordingly.
For a quick example, let’s examine the first round matchup between the Miami Heat and Charlotte Hornets. In Game One on Sunday (4/17), the Heat closed as 4.5-point favorites and received just 45% of spread bets. They ultimately won by 32-points, and this blowout has caused a monumental shift in public betting for Game Two on Wednesday (4/20).
Following their impressive victory, the Heat opened as 5-point favorites and have received 76% of early spread bets. Even though Miami is listed as a larger favorite, their level of public support has increased significantly.
Despite playing an 82-game regular season, many bettors place an inordinate amount of importance on the most recent game. Our past research has found that these overreactions have created excellent opportunities for contrarian bettors during the regular season and the postseason.
Knowing that we could buy low after a blowout loss, we wanted to find the sweet spot for this contrarian staple. Our analysis found that teams coming off a double-digit loss have gone 221-186 ATS (54.3%) with +24.67 units won during the NBA Playoffs.
We also wanted to see whether teams coming off a blowout ATS loss were similarly undervalued, which we defined as any team that had failed to cover the closing spread by at least 10-points. In fact, playoff teams coming off a blowout ATS loss have been even more undervalued during the postseason. Since 2005, teams fitting this criterion have gone 190-142 ATS (57.2%) with +38.97 units won.
|Criteria||Record (ATS)||Win Rate||Units Won||ROI|
|Blowout ATS Loss||190-142||57.2%||+38.97||11.7%|
Unfortunately, both of these strategies have cooled off in recent years. Despite significant profits over the last decade, these basic systems have been treading water since the 2013-14 season. Over this stretch of two plus years, teams coming off a blowout loss have gone 37-35 ATS (51.4%) and teams coming off a blowout ATS loss have gone 35-33 ATS (51.5%).
Oddsmakers are always adjusting their lines to account for recent trends, so it’s important to update your betting systems to account for a constantly changing marketplace. We recommend making sure that all betting systems fit three important criteria:
- Strong driving hypothesis: You need to make sure that there’s a theory to explain your results, otherwise you’ll often times end up with a custom-fitted betting system that is not predictive of future results.
- Large sample size: The size of our sample dictates the amount of information we have and determines our level of confidence.
- Consistent year-to-year results: Having positive returns are important, but knowing that they continue to be profitable is even more crucial. Often times we will see systems that were highly profitable in the mid 2000’s, but have flat lined or dropped off entirely in recent years. There are frequent rule changes and adjustments from oddsmakers that can impact the returns of a betting system, but examining year-to-year-results can indicate whether your system is improving or worsening.
Even though the value from taking teams coming off double-digit losses has begun to wane, we believed that there would still be value if we examined the most extreme blowouts. Bettors may slightly overreact after a 10-point loss, but we surmised that they would become hysterical after a 25-point loss.
As you can see from the table below, our beliefs were definitely confirmed.
|Criteria||Record (ATS)||Win Rate||Units Won||ROI|
|25+ Point Loss||40-20||66.7%||+18.23||30.4%|
|25+ Point ATS Loss||21-12||63.6%||+8.06||24.4%|
Although our sample size and overall units won are reduced substantially, the return on investment soars by leaps and bounds. We also found that over that same stretch of two plus years, teams coming off a blowout loss have gone 7-3 ATS (70%) and teams coming off an ATS blowout loss have gone 6-3 ATS (66.7%).
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