An Examination of the Money Line Market for National Football League Games

Abstract

We examine market efficiency of the opening and closing money lines (wager on the winner of a game) for National Football League (NFL) games from 2007 through 2016. A simple analysis shows that inefficiencies exist in the opening and closing NFL money line market. Inefficiencies in the closing money lines suggests that the money line market fails to completely adjust and eliminate some of these inefficiencies. Further, the market adjustments suggest that bookmakers may take advantage of bettors’ biases to earn profits in excess of their commission. The results here support the existence of a reverse favorite-longshot bias, where bettors tend to overbet the favorite and underbet the underdog. These inefficiencies, however, are unpredictable and vary by season. Finally, utilizing game-specific factors, it appears that the presence of precipitation creates opportunities to earn profits when betting on the favorite.