Here’s a link to a New York Times article discussing research by Justin Wolfers alleging point shaving in college basketball.
Justin Wolfers is also the co-author of an article that is highly critical of research purporting to show a big deterrent effect of the death penalty. I blogged about that issue a few days back.
and 
. You can also watch it on 
To me the most amazing stat in the paper was the fact that the favorites beat the spread in 50.01 percent of the games across the entire sample size. I really thought that overall the outcomes would just be more random than people expected and the underdogs would cover the spread more. Remember that the lines makers don’t care about accurate lines- they only care about getting equal money on both sides so that they can make their money on the vig. I would also think that in most sports the larger the line is the less often the favorites would cover just from the simple standpoint of regression to the mean.
To me the most amazing stat in the paper was the fact that the favorites beat the spread in 50.01 percent of the games across the entire sample size. I really thought that overall the outcomes would just be more random than people expected and the underdogs would cover the spread more. Remember that the lines makers don’t care about accurate lines- they only care about getting equal money on both sides so that they can make their money on the vig. I would also think that in most sports the larger the line is the less often the favorites would cover just from the simple standpoint of regression to the mean.
I am not sure that the thesis is supported by the data, at least as far as discussed by the NYTimes today. There are lot of reasons why favorites don’t cover large spreads that are not reflective of
illegality.
First, as you said in your article “It isn’t clear why bettors prefer favorites, but such a tendency characterizes most betting against a spread.” Bookmakers should therefore raise the spread on clear favorites in order to induce bettors to take the dog.
Second, if a game is out of hand the players and coaches on the winning side have no incentive to take risks in order to increase the margin of victory. Indeed, it can be time to rest the starters and play the scrubs.
Third, coaches who are playing teams that they will have to play again, have an incentive to keep the margin of victory down so as not to antagonize their opponents.
I am not sure that the thesis is supported by the data, at least as far as discussed by the NYTimes today. There are lot of reasons why favorites don’t cover large spreads that are not reflective of
illegality.
First, as you said in your article “It isn’t clear why bettors prefer favorites, but such a tendency characterizes most betting against a spread.” Bookmakers should therefore raise the spread on clear favorites in order to induce bettors to take the dog.
Second, if a game is out of hand the players and coaches on the winning side have no incentive to take risks in order to increase the margin of victory. Indeed, it can be time to rest the starters and play the scrubs.
Third, coaches who are playing teams that they will have to play again, have an incentive to keep the margin of victory down so as not to antagonize their opponents.
Couldn’t Wolfers have named names? What teams are the most egregious violators? Was the Fresno State team with Chris Herren and Dominick Young up there?
Couldn’t Wolfers have named names? What teams are the most egregious violators? Was the Fresno State team with Chris Herren and Dominick Young up there?
I actually think there’s little evidence to support the idea that “It isn’t clear why bettors prefer favorites, but such a tendency characterizes most betting against a spread.” In fact, as Wolfers’ paper demonstrates, most betting markets are remarkably efficient. In the case of college basketball, it isn’t simply that the spread evenly divides favorites and underdogs. It’s also that the point spread serves as an “unbiased forecast” of the actual outcome of the games, meaning that bettors are collectively coming up with remarkably intelligent forecasts of the future.
I actually think there’s little evidence to support the idea that “It isn’t clear why bettors prefer favorites, but such a tendency characterizes most betting against a spread.” In fact, as Wolfers’ paper demonstrates, most betting markets are remarkably efficient. In the case of college basketball, it isn’t simply that the spread evenly divides favorites and underdogs. It’s also that the point spread serves as an “unbiased forecast” of the actual outcome of the games, meaning that bettors are collectively coming up with remarkably intelligent forecasts of the future.