“NBA Gambling Inefficiencies: A Second Look,” (with Sigler, K.) Academic Article uri icon

Abstract

  • Our study examines market efficiency for both point spread betting and totals betting for NBA seasons spanning from 2000–01 to 2007–08. It is motivated by recent contradictory evidence that both support and reject opportunities to exploit inefficiencies in the National Basketball Association (NBA) gambling by Paul and Weinbach (9,11) as well as other evidence suggesting that these opportunities fade as the market responds to new information (12). Based on the results of over 10,000 games in eight consecutive NBA seasons, betting the over on the total points per game is a fair bet, indicating an efficient market. For the higher totals (totals 211-220), the winning percentage on betting the over is above 52.38% (the percentage necessary to cover commissions) in eight of 10 cases, but the null hypothesis of a fair bet cannot be rejected. The results for point spread betting also show strong support for an efficient market in NBA gambling, with one exception: betting the home underdog is profitable for underdogs of 10 points or more. However, this is only true for a very small sub-sample and the inefficiency fades in the most recent sample period.

Publication Date

  • 2012-01-01