Why Should NBA Bettors Take Large Contrarian Favorites?
When we discuss NBA contrarian betting, we include many strategies that can be used to extract value. Betting against the public is one of our cornerstone philosophies, but there are many ways that bettors can exploit public perception by buying on bad news.
We often recommend picking teams on losing streaks, fading winning streaks, and taking the league’s least popular teams. Investors familiar with the concept of “buy low and sell high” shouldn’t be surprised to learn that sports betting is no different. Teams never offer more value than they do after a loss, and there is never a more favorable time to bet against a team than after a victory.
Readers who are unfamiliar with the sports betting marketplace should know that most bettors fall into two categories — sharps or squares. Most bettors can be classified as squares, i.e. recreational weekend warriors who place their wagers based on instinct, rather than number-crunching and data analysis.
Squares have a tendency to pound favorites and overs, which has historically created value on underdogs and unders. We have also found that basketball bettors tend to place too much weight on the importance of home court advantage, which has created additional value on road teams.
On the other hand, sharps are typically wise guys or betting syndicates who spread large bets across multiple sportsbooks. Widely respected, sharps are a smaller group who move lines across the marketplace. These are professional bettors who create their own models and consistently beat the bookie. Although some bettors have unrealistic expectations, the sharpest bettors typically win between 55-57% of their bets.
During the regular season we’ll typically see the majority of square bettors hammering the favorite, but sportsbooks take enough action from sharp bettors to mitigate their risk. During the playoffs, the number of bets placed on every game increases with much of the action coming from squares. This added volume enhances the value derived from betting against the public.
Imagine the sports betting marketplace as a seesaw. If too many square bettors load up on one side (typically caused by an overreaction to recent results), oddsmakers will need to even the weight by adjusting the line and encouraging action on their opponent. These shaded lines create additional value for contrarian bettors who are willing to go against the grain and take the unpopular side.
Recently, we explained that there is a dramatic change in bettors’ behavior between the regular season and postseason. Although squares will overwhelmingly take favorites during the regular season, they’re far more apt to take underdogs during the playoffs. When that underdog receives overwhelming public support, they’re ripe to fade.
Using our Bet Labs software, we found that favorites receiving no more than 40% of spread bets have gone 83-56 ATS (59.7%) during the NBA playoffs. We also found that large underdogs have been particularly undervalued during the postseason, as evidenced by our latest iteration of the Zig-Zag Theory. Knowing that both contrarian favorites and large favorites had been historically undervalued, we wanted to see if these two systems could be combined.
After making some minor tweaks, we found an incredibly lucrative sweet spot for contrarian betting. Since 2005, favorites of at least 4.5-points have gone 316-275 ATS (53.5%) with +25.97 units won. That record improves significantly when we apply our betting against the public ideology.
|Public Betting||Record||Win Rate||Units Won||ROI|
As you can see, 4.5-point favorites receiving less than 40% of spread bets have been extremely lucrative. Over the past eleven years, teams fitting these criteria have gone 53-24 ATS (68.8%) during the NBA Playoffs. In fact, a $100/game bettor would have earned $2,622 by taking every past game match.
It’s extremely rare to find large favorites being ignored by public bettors during the regular season, but we speculated that it would be similarly profitable. Our research found that out of 8,958 teams that closed as favorites of at least 4.5-points, only 401 received less than 40% of spread bets. That means that less than 5% of large favorites offer contrarian value.
However, if you’ve ever looked at the price tag for old comic books or first edition books, you know that rarity and value are often times synonymous. Those same contrarian favorites that have been profitable during the playoffs have gone 226-175 ATS (56.4%) during the regular season. When we combine the regular season and postseason, we find a new system with +65.49 units won.
Bet Labs users are able to copy this system directly from our Think Tank to receive all current game matches for this system and many others. Bettors are also able to view the latest odds and trends from our free NBA odds page.
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