Preseason bias in the NFL and NBA betting markets

Justin L. Davis and Kevin Krieger

Applied Economics, 2017, vol. 49, issue 12, 1204-1212

Abstract: This study extends research in the sports gaming literature by examining the efficiency of betting markets related to preseason professional sporting events. Using NFL (1995–2014) and NBA (2005–2014) data from preseason games, we examine the pricing efficiency of point spreads in these markets and consider evidence of systematic mispricing. Findings suggest point spreads are too large in these situations, providing a profitable betting opportunity for those willing to systematically wager on underdogs. Similar findings are not seen within the context of NFL or NBA regular seasons. These findings are more pronounced as preseason point spreads become larger. Further stratification by week of the NFL preseason demonstrates that underdogs discontinue their superior performance for the one week (Week 3) in which clubs tend to expel a higher level of effort.

Date: 2017
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DOI: 10.1080/00036846.2016.1213367

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