DOCSLIB.ORG

Crowd Wisdom in NFL Point Spread and Over/Under Betting

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Crowd Wisdom in NFL Point Spread and Over/Under Betting Crowd Wisdom In NFL Point Spread and Over/Under Betting Group 4: Jonathan Bell, Tyler Ventura, Sam Cantor, Alan Gadjev, Nate Mays Background Sports Betting is a growing and already substantial business in the United States. Until recently, sports related betting was only legal in specific areas of the United States such as Las Vegas, Delaware, Montana, and Oregon.1 Under the Professional and Amateur Sports Protection Act of 1992 (PASPA), sports betting was banned for all sports excluding parimutuel horse and dog racing and jai alai.2 While sports betting is limited in availability, as of November 2017 $4.9 billion per month was legally bet on sports in Nevada alone. Despite the prohibition, illegal sports betting is very popular in the United States. As of the Supreme Court case Murphy v. ​ National Collegiate Athletic Association (2018), the PASPA was found unconstitutional and the ​ decision to sponsor sports related gambling was relegated to the state governments.3 Since this ruling, a number of states have brought forward bills related to legalization of sports betting. Ohio State economist Jay L. Zagorsky conservatively estimates that the total value of the sports betting market will be $70 billion dollars, but many argue that the value will be approximately $150 billion, with largest estimates at close to $380 billion.4 This project will focus on sports betting on the NFL, specifically point spread betting and over/under betting. Point Spread betting is a form of sports gambling that is particularly popular in Las Vegas sportsbooks. Spread betting involves the setting of a “favorite” and an “underdog” by oddsmakers, and the assigning of additional points to be used when calculating the score. A bettor picks the favorite (F), minus the number of points (B) that they have been docked (F-B=A), or picks the underdog (U), plus the number of points (B) that they have been spotted, 1 https://en.wikipedia.org/wiki/Sports_betting#1970s-2018:_Prohibition_on_sports_betting ​ 2 https://www.govinfo.gov/content/pkg/STATUTE-106/pdf/STATUTE-106-Pg4227.pdf ​ 3 https://caselaw.findlaw.com/us-supreme-court/16-476.html ​ 4https://theconversation.com/market-for-illegal-sports-betting-in-us-is-not-really-a-150-billion-business-966 18 1 (U+B=C), and the winner is determined by if the modified score totals A>C or A<C. Over/Under betting is a form of sports gambling that is not based on the winner or loser of a particular game, but rather on the combined total score of the two opponents. Oddsmakers set a number for the combined total score of the two teams, and bettors have to predict whether or not they think the combined total score of the game will be higher (over) or lower (under) than the number given by the oddsmakers. For this project, crowd wisdom will be represented by Wunderdog Sports compilation of “Public Consensus.” These projections, scraped from other public betting sources, offer the percentage of the public that selected the “favorite” or “underdog” and the “over” or “under” for NFL matchups in the 2017-2018 and 2018-2019 seasons. The “expert” in this project will be represented by the Wunderdog Sports Computer algorithm predictions. Wunderdog, a subscription-based handicapping service, does not publicly offer their final bet predictions, but does offer a free record of their computer algorithm projections. Their actual algorithm is not publicly available, but considers “statistics, power ratings, and hundreds of very high-percentage proprietary historical situational systems. The systems purposefully avoid hunches, ‘soft’ data or personal gut opinions. I look for agreement between all of my sources which results in a few games selected, but they are the cream of the crop.”5 The public therefore benefits from consideration of injuries, trends, situations that are not factored in to Wunderdog’s Computer Models (these are factored in to Wunderdog’s Predictions after the computer calculations and are not publicly available). 5 https://www.wunderdog.com ​ 2 Literature Review & Similar Studies Prediction markets attracted the attention of the public after James Surowiecki published the The Wisdom of Crowds in 2004. It sparked the popularity of prediction markets. Since 2004, ​ ​ a number of studies have been published that examined how to harness crowd wisdom. We have looked at other studies that explore the ways crowds can enhance our predictive abilities for sporting events. The first study we analyzed is titled “Are Crowds Wise When Predicting Against Point Spreads? It Depends on How You Ask” and was published by a group of research professors ​ ​ from various universities. The study tests Surowiecki’s hypothesis that “the judgements of a crowd (as measured by any form of central tendency) will be relatively accurate, even when most of the individuals in the crowd are ignorant and error-prone.”6 Points spread in the NFL and other sports are argued to be an accurate representation of the crowds’ opinion, however, there has also been evidence that crowds are bad at betting against the point spreads and bet too much on the favorite.7 This study tests Surowiecki’s hypothesis by analyzing the way the crowd performed in betting against point spreads that were adjusted to favor the underdog ( i.e. points spread was increased). The study was conducted over 17 weeks of the NFL season in which more than $20,000 (money was put up by conductors of the study) was wagered. The betting was open to anyone in the United States, so the overall population of the participants was geographically diverse. The aggregation mechanism allowed the conductors of the study to 6 http://www.asecib.ase.ro/mps/TheWisdomOfCrowds-JamesSurowiecki.pdf ​ 7 3 perform statistical analyses. As we can see above, all conditions of Surowiecki’s “wise crowd” were satisfied in this study. The study investigated three hypotheses, the first of which was that “crowds will wisely choose against biased point spreads even when they are not told that the spreads are biased.”8 Hypothesis 1 was rejected and it was found that the crowd unwisely bet on the favorite in 89.4% of the cases (p < .001), the crowd lost 56.8% of the wagers made and overall performed worse than 93% of participants. Hypothesis 2 predicts that “crowds will wisely choose against biased point spreads when they are told that the spreads have been increased”. The participants who were told that the point spread was tampered with and to ensure they were informed they had to read the following statement before making any predictions: “Although official point spreads are designed to give each team an equal chance to win the bet, the point spreads inserted below are not necessarily the official point spreads. In fact, some of the point spreads have been increased, though none of them have been decreased. If you have read these instructions, please click the box below.”9 Hypothesis 2 was rejected and it was found that the crowd unwisely bet on the favorite in 82.7% of the cases (p < .001), the crowd lost 57.9% of the wagers made and overall performed worse than 97.4% of participants. The third hypothesis tested whether the crowd had the ability to learn and correct itself along the study: “even if crowds are unwise at the start of the study, they should improve over 8http://citeseerx.ist.psu.edu/viewdoc/download;jsessionid=C00B25FFFC2AD49E56B03502ED761A67?do i=10.1.1.153.8517&rep=rep1&type=pdf 9 Ibid. 4 time, as the crowd’s members accumulate evidence of the inferiority of favorites.”10 Hypothesis 3 was rejected and there was no statistical evidence to support that the crowd’s performance got better or worse over time. Throughout the entire study participants bet heavily on the favorite and failed to learn from their unsuccessful predictions.11 Lastly, instead of betting against the spread and simply trying to predict a team that beats the spread, participants were simply asked to predict a winner and a point differential between the two teams. Participants in this bucket performed much better than what we have seen above: overall the crowd predicted the underdog in 82.7% (p < .001), correctly predicted the team that beats the spread 55.4% of the time and performed better than 95.6% of the crowd.12 The study above showed us that the crowd is not wise when dealing with the conventional ways the betting world operates in (betting against a points spread). However, a prediction market that would ask the participants to predict a point differential would act as a successful prediction mechanism the majority of the time. The second study that we chose to take a closer look at is titled “Testing the Effectiveness of Semi-Predictive Markets: Are Fight Fans Smarter Than Expert Bookies,” conducted by Sean Wise, Milan Miric and Dr. Dave Valliere from Ryerson University. To test for “wisdom of crowds” this study looks at UFC (Ultimate Fighting Championship) main-event cards for a three way period. One important aspect of this study is that UFC main-events are one-off events and differ from football in the sense that fighters rarely fight each other more than once, thus 10 Ibid. 11 Ibid. 12 Ibid. 5 mitigating any of the biases. Even if they do it usually takes at least 6 months to schedule a rematch. The authors of the study state that “one-off events serve as a better proxy for assessing the predictive capacity of a crowd vs. experts as they remove many of the biases which arise when new information emerges” The study compares the predictive abilities of crowds vs. expert bookies in the binary outcome, one-off scenario of UFC events, thus eliminating potential biases towards an irrational outcome.
Load more

Recommended publications
  • Spread Betting Guide
    Finding the right spread betting broker Contents Finding the right spread betting company 2 A financial spread betting shopping list 3 Spread betting education and trading platforms 4 Mobile Trading 5 Minimum account opening level 6 Shopping around on price 7 Market range 8 How to do they make their money? 10 What about CFDs? 14 What about advisory spread betting services? 15 thearmchairtrader.com Finding the right spread betting company Choosing the right spread betting company can be a bewildering process. Many firms are active advertisers at the moment, and are buying spaces in prominent locations, including billboards of major railway stations, in the business sections of national newspapers and online. At a time when many financial services companies are struggling, spread betting firms are continuing to make money. There are now more companies offering spread betting services than ever before. The barriers to entry are lower, while the big, established firms are seeking ways to innovate, and to provide products and services that others cannot afford to deliver. In addition, the overall cost of trading is coming down as more firms seek to compete on price. For the new trader, this is a great time to be starting out, as many companies will bend over backwards to win your business. Finally, many other companies are partnering with the big spread betting firms to offer ‘white labelled’ spread betting. These are usually banks and brokerages who don’t want to go through the cost and effort of establishing their own spread betting operation, but are attracted by the idea of taking a slice of the profits.
    [Show full text]
  • Match Fixing and Sports Betting in Football: Empirical Evidence from the German Bundesliga
    Match Fixing and Sports Betting in Football: Empirical Evidence from the German Bundesliga Christian Deutscher Eugen Dimant Brad R. Humphreys University of Bielefeld University of Pennsylvania West Virginia University This version: January 2017 Abstract Corruption in sports represents an important challenge to their integrity. Corruption can take many forms, including match fixing by players, referees, or team officials. Match fixing can be difficult to detect. We use a unique data set to analyze variation in bet volume on Betfair, a major online betting exchange, for evidence of abnormal patterns associated with specific referees who officiated matches. An analysis of 1,251 Bundesliga 1 football matches from 2010/11 to 2014/15 reveals evidence that bet volume in the Betfair markets in these matches was systematically higher for four referees relative to matches officiated by other referees. Our results are robust to alternative specifications and are thus suggestive of potentially existing match fixing and corruption in the German Bundesliga. Keywords: corruption, betting exchange, football, referee bias JEL: D73, K42, L8, Z2 Deutscher: University of Bielefeld, Faculty of Psychology and Sports Science, Department of Sport Science. Postfach 10 01 31, D-33501 Bielefeld Germany; Phone : +49 521 106-2006; Email: christian.deutscher@uni- bielefeld.de Dimant: University of Pennsylvania, Behavioral Ethics Lab, Philosophy, Politics and Economics Program. 311 Claudia Cohen Hall, 249 S 36th Street, 19104 Philadelphia, USA; Phone: 215-898-3023; E-mail: [email protected] Humphreys: Department of Economics, West Virginia University. 1601 University Ave., PO Box 6025, Morgantown WV 26506-6025; Phone: (304) 293-7871; Email: [email protected] We thank Michael Lechner, Victor Matheson and Amanda Ross as well as participants at the WEAI Portland 2016 and ESEA 2016 conference for comments on earlier versions of this paper.
    [Show full text]
  • IFA Rules Against Illegal and Irregular Betting and Match-Fixing 2016
    IFA Rules against illegal and irregular betting and match-fixing Preamble The International Fistball Association (IFA), being aware, that - betting is part of sport since the beginning; - sports betting is a way of demonstrating the public’s attachment to sports and athletes; - sports betting, offered by national lotteries or private operators, is one of the most important means of financing sport; - without sport, there is no sports betting; - national legislation concerning the participation of sports betting operators to the financing of the sports movement is different from one country to another; however everything possible must be done to ensure a fair return from the betting operators, not only for the organizers of sports events, - but more generally for the development of sport; - the IOC adopted the Olympic Movement Code on the Prevention of the Manipulation of Com- petitions to strengthen the integrity and credibility of sport and for the successful protection of clean athletes; - everything possible must be done to ensure the integrity of sports competitions; and being committed to safeguard the integrity in Fistball has established the following rules against illegal and irregular betting and match-fixing: Definitions: Participants: Participants in any IFA sports events and competitions sanctioned by any member fed- eration, including all accredited individuals like athletes, judges, the athletes’ entourage, IFA and member federation employees, officials and families, and the event organizing committee and their entourage.
    [Show full text]
  • Criminalizing Match-Fixing As America Legalizes Sports Gambling
    Marquette Sports Law Review Volume 31 Issue 1 Fall Article 2 2020 Criminalizing Match-Fixing as America Legalizes Sports Gambling Jodi S. Balsam Follow this and additional works at: https://scholarship.law.marquette.edu/sportslaw Part of the Entertainment, Arts, and Sports Law Commons Repository Citation Jodi S. Balsam, Criminalizing Match-Fixing as America Legalizes Sports Gambling, 31 Marq. Sports L. Rev. 1 () Available at: https://scholarship.law.marquette.edu/sportslaw/vol31/iss1/2 This Article is brought to you for free and open access by the Journals at Marquette Law Scholarly Commons. For more information, please contact [email protected]. BALSAM – ARTICLE 31.1 12/17/2020 8:47 PM ARTICLES CRIMINALIZING MATCH-FIXING AS AMERICA LEGALIZES SPORTS GAMBLING JODI S. BALSAM INTRODUCTION1 In May 2018, the Supreme Court decided Murphy v. NCAA,2 striking down the Professional and Amateur Sports Protection Act (PASPA) that prohibited states from allowing sports betting.3 At this writing, more than two years after PASPA’s judicial repeal, eighteen states have enacted legal sports betting, five states plus Washington, D.C. have passed legislation that is pending launch, and twenty-four more have introduced sports gambling bills.4 Somewhat myopically, these legislative efforts fail to address the game integrity concerns flagged by the sports leagues and other entities that create the contests on which Associate Professor of Clinical Law, Director of Externship Programs, Brooklyn Law School. I received excellent research assistance from Nick Rybarczyk, Matthew Schechter, Madison Smiley, and Katherine Wilcox. Thank you to Daniel Wallach and to participants in the Brooklyn Law School Faculty Workshop for their time and helpful comments and suggestions.
    [Show full text]
  • Why Spread Bet? 1 What Is Spread Betting? 3 Pros 5 Cons 8
    • • • • Sample • • • • www.harriman-house.com/spreadbetting2 The Beginner’s Guide to Financial Spread Betting Step-by-step instructions and winning strategies By Michelle Baltazar HARRIMAN HOUSE LTD 3A Penns Road Petersfield Hampshire GU32 2EW GREAT BRITAIN Tel: +44 (0)1730 233870 Fax: +44 (0)1730 233880 Email: [email protected] Website: www.harriman-house.com First published in Great Britain in 2005, this 2nd edition published in 2008 Copyright © Harriman House Ltd The right of Michelle Baltazar to be identified as the author has been asserted in accordance with the Copyright, Design and Patents Act 1988. ISBN: 1-905641-82-6 ISBN 13: 978-1-905641-82-6 British Library Cataloguing in Publication Data A CIP catalogue record for this book can be obtained from the British Library. All rights reserved; no part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without the prior written permission of the Publisher. This book may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of binding or cover other than that in which it is published without the prior written consent of the Publisher. Printed and bound by CPI, Antony Rowe. No responsibility for loss occasioned to any person or corporate body acting or refraining to act as a result of reading material in this book can be accepted by the Publisher, by the Author, or by the employer of the Author. Contents Biography vii Acknowledgements
    [Show full text]
  • Determinants of NFL Spread Pricing: Incorporation of Google Search Data Over the Course of the Gambling Week Shiv S
    Determinants of NFL Spread Pricing: Incorporation of Google Search Data Over the Course of the Gambling Week Shiv S. Gidumal and Roland D. Muench Under the supervision of Dr. Emma B. Rasiel Dr. Michelle P. Connolly Department of Economics, Duke University Durham, North Carolina 2017 Shiv graduated with High Distinction in Economics and a minor in History in May 2017. Following graduation, he will be working in New York as an Associate Consultant at Bain & Company, a management-consulting group. He can be contacted at [email protected]. Roland graduated with High Distinction in Economics and a minor in Mathematics in May 2017. Following graduation, he will be working in New York as an Analyst at Jefferies, an investment bank. He can be contacted at [email protected]. Table of Contents Acknowledgements ........................................................................................................................ 3 Abstract .......................................................................................................................................... 4 1. Introduction ................................................................................................................................ 5 2. NFL Wagering Market Structure ................................................................................................. 7 3. Literature Review ..................................................................................................................... 13 4. Theoretical Framework ...........................................................................................................
    [Show full text]
  • Beating the Odds: Devising a Profitable Betting System Using Perceived Momentum in the Nfl
    TCNJ JOURNAL OF STUDENT SCHOLARSHIP VOLUME XXII APRIL 2020 BEATING THE ODDS: DEVISING A PROFITABLE BETTING SYSTEM USING PERCEIVED MOMENTUM IN THE NFL Author: Samantha Costigan Faculty Sponsor: John Ruscio Department of Psychology ABSTRACT Many fans, players, and coaches hold a belief that during a sporting event, successful outcomes increase the likelihood of subsequent successes (Arkes, 2010; Gilovich, Vallone, & Tversky, 1985; Lehman & Hahn, 2013; Vergin, 2000). This concept is known as sports momentum and is thought to be present in a variety of sports both between and within games (Arkes, 2010; Fry & Shukairy, 2012; Gilovich, Vallone, & Tversky, 1985; Richardson, Adler, & Hankes, 1988; Vergin, 2000). Despite the incredibly common belief in momentum, there is very little evidence to support its existence (Fry & Shukairy, 2012; Gilovich, Vallone, & Tversky, 1985; Vergin, 2000). Since point spreads, which are a prediction of the margin of victory for each game utilized in sports betting, are influenced by gamblers’ predictions of game outcomes and many gambles hold a false belief in sports momentum (Camerer, 1989; Gandar, Zuber, O'Brien, & Russo, 1988; Lock, 1997; Vergin & Scriabin, 1978), it is possible that this perception of momentum can be exploited to inform betting practices. The present study aimed to investigate this and revealed that when momentum calculation takes win probability into account, momentum is significantly correlated with a team’s performance in relation to the point spread. This information can be utilized to make profitable bets, all of which are more profitable than a zero validity betting system resulting in winning 50% of bets. Overall, this study reveals that it may be possible to devise a system to inform bets using perceived momentum in the NFL.
    [Show full text]
  • Spread Betting Companies Avid for a Share Smade Between a Trader and a Spread of This Technological Boom
    10 Risk&Regulation, Winter 2013 RiskRisk&Regulation,&Regulation, Summer Winter 20112013 11 CARRRESEARCH Claire Loussouarn explains how a gambling instrument became a popular and mainstream investment product in the UK. pread betting is an unusual name for a through the internet, the UK saw an increase in the financial product. A spread bet is a contract number of spread betting companies avid for a share Smade between a trader and a spread of this technological boom. The risk appetite of betting company based on a prediction of how betting firms, especially the smaller ones, increased much a market in an index, currency pair, share as a result of competitive pressure. or commodity will move up or down. If the market behaves in favour of the trader, the spread better can Despite growing competition, IG, the oldest running potentially win a much bigger sum of money than the and largest spread betting company in the world one he or she originally invested. These winnings are represents 44 per cent of the market shares, and not classified as capital gains so the investor owes serves as a yardstick of the industry’s health. In May The tax-free perk is one of the nothing to the taxman. With or without expertise 2013, IG registered a net trading profit of £361.9 or professional connection to the City of London, million, a slight slowdown from 2012 but still up £27.6 markets at the time, companies could now offer to spread bet’s unique selling point anyone can spread bet from their own account on a million from 11 years ago.
    [Show full text]
  • Testing the Efficiency of the NFL Point Spread Betting Market Charles L
    View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Scholarship@Claremont Claremont Colleges Scholarship @ Claremont CMC Senior Theses CMC Student Scholarship 2014 Testing the Efficiency of the NFL Point Spread Betting Market Charles L. Spinosa Claremont McKenna College Recommended Citation Spinosa, Charles L., "Testing the Efficiency of the NFL Point Spread Betting Market" (2014). CMC Senior Theses. Paper 986. http://scholarship.claremont.edu/cmc_theses/986 This Open Access Senior Thesis is brought to you by Scholarship@Claremont. It has been accepted for inclusion in this collection by an authorized administrator. For more information, please contact [email protected]. CLAREMONT MCKENNA COLLEGE Testing the Efficiency of the NFL Point Spread Betting Market SUBMITTED TO Professor Serkan Ozbeklik AND DEAN NICHOLAS WARNER BY Charles L. Spinosa FOR SENIOR THESIS Fall 2014 December 1, 2014 Spinosa 3 I. Abstract This paper examines the efficiency of pricing in the NFL point spread betting market, as hypothesized by the Efficient Market Hypothesis, through both statistical and economic tests. This market provides a simpler framework to test such economic hypotheses than conventional financial markets. Using a larger sample size than past literature, this paper finds that while the market is efficient in the aggregate sense, there are still some profit opportunities which imply pricing inefficiencies. Spinosa 4 I. Contents I. Abstract ...................................................................................................................................
    [Show full text]
  • A Guide to Financial Spread Betting
    0117 988 9915 | www.hlmarkets.co.uk A guide to Financial Spread Betting For more information please contact us on 0117 988 9915 or visit our website www.hlmarkets.co.uk One College Square South, Anchor Road, Bristol, BS1 5HL www.hl.co.uk Contents 3 One of the most flexible cost- efficient ways to trade the world’s markets 4 What is Financial Spread Betting? 5 Is it really tax free? 7 How does it work? 8 Going short Before you continue, 10 Introducing margin a word of caution 12 Ongoing margin and margin calls 13 Choosing the right timeframe Spread Betting involves initially depositing only a 14 Financing small percentage of the total trade value, and so losses 16 How much does it cost? could quickly exceed your initial deposit requiring you to make further payments. This makes it higher 17 Calculating the cost of your trade risk, and is why it should only be considered by more 18 Binary Bets experienced and sophisticated investors. 18 Tips on becoming a better trader This guide does not constitute personal investment advice. Spread Betting is not suitable for everyone; 19 Frequently Asked Questions please understand the risks involved and if you are in any doubt of its suitability for your circumstances you should seek personal advice. Any examples contained within this guide are for indication purposes only. Please ensure you fully understand the terms of any bet before opening a position. 2 One of the most flexible cost-efficient ways to trade the world’s markets Most investors reading this guide will have bought and sold shares through a traditional stockbroker - but what if you could access more markets and have more investment choice? What if you had the potential of being able to profit in any market condition and initially pay only part of the full market value of the deal? What if there was no separate commission and everything was built into a narrow spread? A growing number of experienced private investors are Colin Dewar already doing this by using Financial Spread Head of HL Markets Betting for shorter term trading as part of a balanced portfolio.
    [Show full text]
  • Global Match-Fixing and the United Statesâ•Ž Role in Upholding
    Global Match-Fixing and the United States’ Role in Upholding Sporting Integrity Kevin Carpenter * Introduction ..................................................................................................... 214 I.What is match-fixing and what are the drivers? ........................................... 215 II.Recent match-fixing in global sports........................................................... 215 III.History of match-fixing in the United States ............................................. 218 IV.The seriousness of the threat and why fight it?.......................................... 219 V.Current approach taken by US sports governing bodies to match-fixing ... 220 VI.The US attitude to sports betting ............................................................... 221 VII.Europe looking to lead the way ................................................................ 222 VIII.Other jurisdictions with significant illegal sports betting ....................... 224 IX.Match-fixing and London 2012 ................................................................. 225 X.Is there a significant appetite for a worldwide match-fixing agency? ........ 227 XI.Where does this leave sport and what action does the US need to take? ... 228 INTRODUCTION Match-fixing has never been more prominent on the global stage than at the current time for a number of reasons including: the badminton scandal at the London 2012 Olympic Games, the recent Europol announcement that 680 soccer games were suspected of being fixed worldwide implicating 425
    [Show full text]
  • Testing the Efficiency of the NFL Point Spread Betting Market Charles L
    Claremont Colleges Scholarship @ Claremont CMC Senior Theses CMC Student Scholarship 2014 Testing the Efficiency of the NFL Point Spread Betting Market Charles L. Spinosa Claremont McKenna College Recommended Citation Spinosa, Charles L., "Testing the Efficiency of the NFL Point Spread Betting Market" (2014). CMC Senior Theses. Paper 986. http://scholarship.claremont.edu/cmc_theses/986 This Open Access Senior Thesis is brought to you by Scholarship@Claremont. It has been accepted for inclusion in this collection by an authorized administrator. For more information, please contact [email protected]. CLAREMONT MCKENNA COLLEGE Testing the Efficiency of the NFL Point Spread Betting Market SUBMITTED TO Professor Serkan Ozbeklik AND DEAN NICHOLAS WARNER BY Charles L. Spinosa FOR SENIOR THESIS Fall 2014 December 1, 2014 Spinosa 3 I. Abstract This paper examines the efficiency of pricing in the NFL point spread betting market, as hypothesized by the Efficient Market Hypothesis, through both statistical and economic tests. This market provides a simpler framework to test such economic hypotheses than conventional financial markets. Using a larger sample size than past literature, this paper finds that while the market is efficient in the aggregate sense, there are still some profit opportunities which imply pricing inefficiencies. Spinosa 4 I. Contents I. Abstract .................................................................................................................................... 3 I. Contents ..................................................................................................................................
    [Show full text]