Do NFL underdogs consistently beat the spread?
I learned two things from investment blogger Eddy Elfenbein this week.
First, I learned that if you were invested in the S&P 500 from 1932 to 2009, you'd have made a total return of
63,000% 14,000% (not including dividends). But if you were invested only the middle 2/3 of each month, you'd have LOST money. Wow.
Second, I learned that, in the NFL, heavy favorites consistently fail to beat the spread.
Since 1978, teams favored by 12 points or more were 220-275-9 against the spread. Ignoring the nine pushes, that's a winning percentage of only .444. The effect was easily large enough to turn a profit, even after the bookie's vigorish.
I wondered if, maybe, this was an anomaly that existed in earlier years, but that bookies eventually caught on to and erased. But, since 2005, those heavy favorites are 64-94-2.
Does the effect disappear for "less heavy" favorites? Again going back to 1978, and looking at teams favored by 6 to 11.5 points ... they were 1361-1475-57 (.480 excluding pushes). Teams favored by 0.5 to 5.5 points were 2197-2330-156 (.485). So, yes, it seems the effect is more pronounced for the heavy favorites.
I broke it down a bit further, into "one point" buckets from 8.5 up. Teams favored by 8.5 or 9 points were 163-187 (.466). Teams favored by 9.5 or 10 were 186-193-12 (.491). And so on.
For every one of those groups, except one, the favorites had a losing record. (The exception was teams favored by 15.5 or 16, who went 19-15 against the spread.) No favorite above 20 points has ever covered (0-7).
Is this a known anomaly? Maybe it's just my ignorance, but I've never heard that this happens. Well, actually, I should have known ... it was obvious in the numbers for the "home underdog" effect.
But, actually, it seems to applies equally to home/road. Home favorites (12+) were 194-236-8, while road favorites were 26-39-1.
I'm very, very surprised.
Add this to the list of arguments against NCAA basketball point shaving. If favorites failing to cover is evidence of point shaving in the NCAA, then it must also be evidence of point shaving in the NFL too, right?
But hardly anyone argues that. I still think it's just a case of bookies shading their lines towards the
(P.S. Good discussion of bookies' lines in some of MGL's comments here.)