Research on sports betting markets has shown that the timing of bets can affect profitability and market efficiency. Studies suggest that early bets tend to be more profitable, as bettors who place wagers further from game day often perform better (Innocenti et al., 2013). This is likely because early bets are placed before the market has fully adjusted to new information.
As more bets come in, odds change, and research shows that these adjustments generally make predictions more accurate. The movement of betting lines from the time they open to when they close tends to improve forecast accuracy, meaning that the market becomes more efficient over time (Gandar et al., 1998; Gandar et al., 2000). However, some studies have found potential strategies in betting against the first movements toward favorites and following late movements toward underdogs, which can be profitable in certain situations (Paul & Weinbach, 2008).
Some bettors, often referred to as informed traders, appear to have access to private information that allows them to influence market efficiency. These bettors tend to make well-timed wagers that take advantage of weaknesses in the market (Dare et al., 2005). The size and timing of bets also impact market behavior. Large bettors who act on widely available information typically place their wagers early, while smaller bettors who may have access to private insights often wait until the last minute to place their bets (Ottaviani & Sørensen, 2004, 2006).
These patterns help explain certain betting market trends, such as the favorite-longshot bias, where bettors tend to overvalue longshots and undervalue favorites. Late bets also tend to be more informative, as they incorporate the most up-to-date information before the event takes place (Krieger et al., 2015).
The movement of betting lines from the time they open to when they close tends to improve forecast accuracy, meaning that the market becomes more efficient over time
Summary of: Gandar et al 1998 & 2023
Anecdote
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Articles Cited
- “Kevin Krieger, R. Pace, Nicholas Clarke, Clay Girdner (2015): Anchoring, affect, and efficiency of sports gaming markets around playoff positioning, https://doi.org/10.61190/fsr.v24i4.3242
- The paper examines whether sports betting markets fully price in the “”letdown effect”” where teams that have clinched playoff positions or seeds may underperform relative to point spread expectations, providing a potential profitable betting strategy.”
- “J. Gandar, Richard A. Zuber, W. Dare (2000): The Search for Informed Traders in the Totals Betting Market for National Basketball Association Games, https://doi.org/10.1177/152700250000100205
- The paper examines the betting market for total points scored in NBA games and finds that closing totals lines are more accurate forecasts than opening lines, and that line changes move the lines in the correct direction and magnitude to eliminate biases in opening lines, causing prices to more accurately reflect fundamental values.”
- “W. Dare, J. Gandar, Richard A. Zuber *, Robert M. Pavlik (2005): In search of the source of informed trader information in the college football betting market, https://doi.org/10.1080/0960310042000306961
- The paper examines the sources of information used by informed bettors in the college football betting market, finding that the unexplained movements in betting lines are most important in predicting final game outcomes, indicating that informed bettors are using private information not available in publicly disseminated sources.”
- “J. Gandar, W. Dare, Craig R. Brown, Richard A. Zuber (1998): Informed Traders and Price Variations in the Betting Market for Professional Basketball Games, https://doi.org/10.1111/0022-1082.155346
- The paper examines changes in betting lines from the opening to the closing of the point spread betting market on National Basketball Association games to look for evidence of informed trader betting.”
- “A. Innocenti, T. Nannicini, R. Ricciuti (2013): The Importance of Betting Early, https://doi.org/10.2139/ssrn.1999459
- Bettors perform better when they place their bets farther away from the game day, due to information overload as the event approaches.”
- “R. Paul, A. Weinbach (2008): Line Movements and Market Timing in the Baseball Gambling Market, https://doi.org/10.1177/1527002507310435
- This paper analyzes betting strategies based on line movements in Major League Baseball and tests for evidence of informed bettors in two different sportsbook markets.”
- “M. Ottaviani, P. Sørensen (2004): The Timing of Bets and the Favorite-Longshot Bias, –
- The paper proposes an explanation for the observed phenomena in parimutuel betting markets, where there is a disproportionate number of bets on longshots, late bets are more informative than early bets, and a significant fraction of bets are placed early, based on the equilibrium incentives of privately informed rational bettors who profit from betting against bettors with recreational motives.”
- “M. Ottaviani, P. Sørensen (2006): The timing of parimutuel bets, –
- The paper proposes a dynamic model of parimutuel betting that explains three empirical regularities observed in betting markets: a sizeable fraction of bets is placed early, late bets are more informative than early bets, and proportionally too many bets are placed on longshots.”
Insufficient Detail?
At times it is difficult to answer the question as there are not enough relevant published journal articles to relate. It could be that the topic is niche, there’s a significant edge (and researchers prefer not to publish), there is no edge or simply no one has thought to investigate.
