The Performance of Betting Lines for Predicting the Outcome of NFL Games

TL;DR

This study evaluates NFL betting lines as a collective intelligence tool, demonstrating their predictive accuracy for game outcomes and profitability of betting strategies based on line movements.

Contribution

It provides empirical evidence that betting lines can predict game winners with high accuracy and identifies profitable betting strategies using line differences.

Findings

Line difference predicts divisional winners with 75% accuracy

Betting on underdog home teams yields a 53.5% win rate

Betting strategies based on line movements can be profitable

Abstract

We investigated the performance of the collective intelligence of NFL fans predicting the outcome of games as realized through the Vegas betting lines. Using data from 2560 games (all post-expansion, regular- and post-season games from 2002-2011), we investigated the opening and closing lines, and the margin of victory. We found that the line difference (the difference between the opening and closing line) could be used to retroactively predict divisional winners with no less accuracy than 75% accuracy (i.e., "straight up" predictions). We also found that although home teams only beat the spread 47% of the time, a strategy of betting the home team underdogs (from 2002-2011) would have produced a cumulative winning strategy of 53.5%, above the threshold of 52.38% needed to break even.