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Betting with house money: reverse line movement based strategies in college football totals markets

Author

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  • James Francisco

    (Auburn University at Montgomery)

  • Evan Moore

    (Auburn University at Montgomery)

Abstract

This article tests the efficient market hypothesis and the profitability of a simple betting strategies in NCAA college football. We examine all games that have a total, or over/under, from September 2005 through January 2016. We investigate whether betting based on “reverse line movement” in an effort to follow the actions of “sharps,” or professional bettors, is profitable over the time period. We find that, in general, following reverse line movement is not a profitable strategy with regard to the totals markets in college football.

Suggested Citation

  • James Francisco & Evan Moore, 2019. "Betting with house money: reverse line movement based strategies in college football totals markets," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 43(4), pages 813-827, October.
    • Handle: RePEc:spr:jecfin:v:43:y:2019:i:4:d:10.1007_s12197-019-09479-3
    DOI: 10.1007/s12197-019-09479-3
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    References listed on IDEAS

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    1. Michael Sinkey & Trevon Logan, 2014. "Does the Hot Hand Drive the Market? Evidence from College Football Betting Markets," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 40(4), pages 583-603, September.
    2. Rodney Paul & Andrew Weinbach, 2005. "Bettor preferences and market efficiency in football totals markets," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 29(3), pages 409-415, September.
    3. Daniel Kuester & Shane Sanders, 2011. "Regional information and market efficiency: the case of spread betting in United States college football," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 35(1), pages 116-122, January.
    4. Rodney Paul & Andrew Weinbach, 2011. "NFL bettor biases and price setting: further tests of the Levitt hypothesis of sportsbook behaviour," Applied Economics Letters, Taylor & Francis Journals, vol. 18(2), pages 193-197.
    5. Salaga, Steven & Tainsky, Scott, 2015. "Betting lines and college football television ratings," Economics Letters, Elsevier, vol. 132(C), pages 112-116.
    6. James Francisco & Evan Moore, 2018. "A comment on Paul and Weinbach’s (2005) “Bettor preferences and efficient markets in totals markets”," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 42(4), pages 836-840, October.
    7. B. Jay Coleman, 2017. "Team Travel Effects and the College Football Betting Market," Journal of Sports Economics, , vol. 18(4), pages 388-425, May.
    8. repec:bla:jfinan:v:43:y:1988:i:4:p:995-1008 is not listed on IDEAS
    9. Steven D. Levitt, 2004. "Why are gambling markets organised so differently from financial markets?," Economic Journal, Royal Economic Society, vol. 114(495), pages 223-246, April.
    10. Ravija Badarinathi & Ladd Kochman, 1996. "Football Betting and the Efficient Market Hypothesis," The American Economist, Sage Publications, vol. 40(2), pages 52-55, October.
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    Cited by:

    1. Robert Arscott, 2023. "Market Efficiency and Censoring Bias in College Football Gambling," Journal of Sports Economics, , vol. 24(5), pages 664-689, June.
    2. Kevin Krieger & Justin Davis, 2024. "Examining the impact of visibility on market efficiency: lessons from movement in NFL betting lines," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 48(2), pages 263-279, June.

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    More about this item

    Keywords

    College football; Gambling; Financial markets; Recreation;
    All these keywords.

    JEL classification:

    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • G29 - Financial Economics - - Financial Institutions and Services - - - Other
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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