Title

A better way to gauge profitability

Document Type

Article

Publication Date

2008

Department

Accounting and Finance

Abstract

Sports betting markets continue to receive considerable attention from researchers regarding questions of market efficiency. The vast majority of papers have tested these markets with respect to the outcome of a single game. This article is the first to examine the National Basketball Association (NBA) season wins total over/under betting market. Woodland and Woodland (2013) investigated the analogous market for the National Football League (NFL), and found it to be sufficiently inefficient to provide bettors with profitable wagering opportunities. Betting rules are motivated by bettor biases in assessing publicly available information. Although the NBA season wins total market is slightly more efficient than the NFL, profitable betting strategies are still available for both the over and under bets. Individuals tend to overvalue a team's performance in the previous season and demonstrate a sentiment bias, with a preference towards stronger teams.