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|
* 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.
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.