After analyzing whether the bookmakers choose the sides in the markets for betting on the difference in the account, Joseph Buchdal now turned his attention to the market for betting on the general account in NBA games. Read on to find out if there is a bias effect in certain NBA betting markets from which bookmakers can benefit.
Last month, I published a two-part article that explored the reasons why bookmakers can use the bias effect in the betting market on the difference in the score, the effectiveness of which is not ideal. Bookmakers work in the commercial field. If they can take action to make a profit exceeding published over rounds, why don’t they?
If players place more bets on an increase on one side of the market than on the other, bookmakers can increase their income using the bias effect regarding the difference against the preferences of the players, provided that the players do not notice this. The question becomes more interesting if we consider previous scientific studies, the results of which showed that players may have a tendency to place bets on increasing the difference in the favorites score.
Looking through the evidence from the NBA match data set in previous years, I found that the biggest favorites with a handicap actually covered their score difference in less than half the cases. If players placed bets to increase this difference, bookmakers undoubtedly increased their income. Nevertheless, in general, the results of the favorites and outsiders did not differ.
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What is the situation on the general account betting market? On its Twitter feed, Pinnacle has published BetShare indicators for many of its markets – the shares of customers who have placed bets on one side or the other. After analyzing these indicators, I came to the conclusion that for each sport – the NHL, NBA, Major League Baseball, NFL, football and tennis – the proportion of rates for increasing has always been greater than rates for lowering.
For 334 games, the average number of BetShare promotion bets was 62%. And although we cannot be sure that the exact same asymmetry also applies to the volume of bets, the bottom line is that bookmakers can have a financial incentive to use the effect of bias in the betting market on the general account as well as on the betting market to the difference in the invoice. The purpose of this article is to examine evidence from the same NBA match data set used last month.
For what reason can players choose to raise bets?
For what reason can players prefer to place bets to increase in the market for betting on a common account or in the market for the total number of goals? One possible explanation is the fear of defeat, the tendency of people to strive mainly to avoid defeat, and not to win.
Let’s look at what is best to increase or decrease. At its core, lowering bets automatically win at the beginning of the match and remain winning until enough points (or goals) are collected so that they turn into losing ones. On the contrary, increase bets at the beginning of the game are losing and remain so until enough points (or goals) are collected so that they turn into winning ones.
If players are susceptible to fear of defeat, they may give a much greater preference for the opportunity to see the transformation of a losing bet into a winning one and not vice versa.
Psychologists have proven that the pain that defeat brings is two times stronger than the joy that victory gives. If so, we can reasonably assume that twice as many players will prefer higher bets (which turn from losing to winning) than lowering (which turn from winning to losing). In this case, the considered shares of BetShare will make sense.
Do bookmakers use the bias effect in relation to the percentage of bets on the total score for the NBA?
In a sample of 334 percentage of bets, my sub-sample of NBA games is characterized by a separation of 64% / 36% in favor of higher bets. If these indicators also reflected the share of funds spent on bets, then using only 1% of the bias effect on the market (49% / 51% of winning bets on increasing versus winning bids on lowering) would increase revenues: theoretical profit margin would increase from 2.5 % to 3.0% or up to 3.6% with a 2% bias effect. Is there any evidence of this?
From the same sample of 15 508 NBA matches over 12 seasons, which was also used to analyze the bias effect when placing bets on the difference in the score, 7553 matches (or 48.7% of the total) ended with a total number of points that exceeded the line coefficient closing. At the same time, 7750 matches (or 50% of the total) ended with a total number of points that were less than the closing line coefficient, and the result of 205 (or 1.3%) matches exactly corresponded to the coefficient.
If we discard bets on 205 matches, which exactly correspond to the forecast data of bookmakers for closing the market, the separation will be 49.4% / 50.6% in the direction that we could have predicted by putting forward the initial hypothesis.
However, such results are not statistically significant. When checking according to the chi-square criterion, the p-value is 0.11 (or 11%), that is, such results can be accidentally obtained in 11% of games, provided that bookmakers intentionally do not use the effect of bias in the betting market on the general score for the NBA against bets on the increase. In order to reasonably exclude only the will of chance, the p-value should be at least 0.05, and even better 0.01 or even 0.001.
However, this does not mean that bookmakers do not use the effect of bias in the market for betting on a common account in NBA games. If such a separation is characteristic of larger samples of matches, eventually statistical significance will be achieved. Nevertheless, based only on these data, we cannot confirm that the market in which there is a bias effect does occur.