Close but no cigar: does winning the game moderate or amplify failing to cover the spread in future NFL games

ABSTRACT

In this paper, I examine the joint role of the previous game’s outcome with and without the spread on wagers’ preferences and outcomes in the NFL gambling market. The results show that gamblers are more likely to wager on the home team if they covered the spread in their previous game, while they are less likely to bet on the home team if the visiting team won their last game (not considering the spread). Further results show that teams are more likely to cover the spread if they covered the spread but lost their previous game. Profitable betting strategies are then put forward based on this information.

KEYWORDS:

• Financial markets
• Gambling
• sports betting
• market efficiency
• Momentum

JEL CLASSIFICATION:

• G1
• G4
• L83

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

¹ Paul and Weinbach (2005), Paul, Weinbach, and Humphreys (2011), and Shank (2018) show a contrarian strategy is profitable.

² Pushes are excluded from the home cover calculation. If a team pushes its previous game, it is excluded from this week’s analysis.

³ This type of profitability analysis is preferred compared to other analyses, such as t-tests, due to the low sample size making it hard to get enough power to conduct the test.