Informational Differences in NFL Point Spread and Moneyline Markets
16 Pages Posted: 29 Apr 2012
Date Written: April, 27 2012
Abstract
In this paper we test the efficiency of NFL betting markets by examining the ability of NFL point spread and moneyline markets to incorporate information. While bookmakers may properly evaluate available information when setting point spreads and moneylines, we show that the nature of point spread markets makes full information incorporation difficult. We test if information from the finer moneyline market can be used to predict whether favorites will cover the spread in the point spread market. We find that for games with the same point spread, betting on (against) the most (least) favored teams to win (lose), according to the moneyline, results in chances to profit, suggesting an inefficiency in the point spread market.
Keywords: Market Efficiency, NFL, Sports Betting, Information Incorporation, Information Flow, Point Spread, Moneyline
JEL Classification: D82, G12, L8, D81
Suggested Citation: Suggested Citation