Using Head Coaches to Exploit the Gaps in NFL Week 1 Betting Markets
Open AccessThe objective of this study is to identify and evaluate unrealized factors that have an effect on the result of the National Football League’s (NFL) betting outcomes for Week 1 of the season. This research continues recent recognition which exploits a degree of inefficiency within the modern NFL betting market, as bettors can always develop strategies that will allow them to become profitable (Shank, 2018). Over time, NFL oddsmakers have updated their algorithms based on past trends, such as lowering the advantage for home teams and raising the advantage for favorites (Tamarkin et al., 1991). In theory, this evolution from oddsmakers should make the NFL markets efficient over time. As trends change, winning strategies from one year will not be winning strategies in the future due to adjustments from oddsmakers (Loutsch, 2020). The authors of this study will show that, for Week 1, there are betting strategies that have been profitable over time, thus causing an inefficient market. So the question remains: Why does the gambling market for Week 1 behave differently than other weeks? The authors argue that this increased inefficiency is due to an inability to properly quantify an NFL offseason. The authors of this paper will quantify relevant NFL offseason factors, such as new members of the team and preseason success. Specifically, the authors will determine which offseason factors have seen a steady or increased correlation with profitability by using data from the 2017-2020 seasons. Once determining the optimal winning strategy for gambling on Week 1 of the NFL season, the authors will construct a Bayesian Logistic Regression model to predict the outcome of 2021 Week 1 games.
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