NFL Betting Picks: Backing low-quality dogs vs. their division

The first action of the NFL season has historically proven a golden opportunity to exploit inefficiency in the betting market. Specifically, we have observed that NFL bettors exhibit a consistent bias in week 1 toward better teams, and are less inclined to side with squads with lower expectations and worse recent performance. These behaviors do not properly account for factors such as offseason moves that alter teams' forward prospects, the potential of random variation (i.e. luck) in explaining prior performance and/or the normalizing effect of betting spreads. Accordingly, opportunities for more objective bettors to profit off Joe Public generally abound at the start of each year. We detail below one angle that has consistently capitalized on casual bettor's irrational tendencies.

The system indicated in the graphic above has delivered a stunning 33% return on investment over the lookback period, with losses in only three seasons out of the last 20 (one of which was a nominal loss on a 2-2 ATS record).

As more formal emprical support for this angle, in an examination of college and pro football over a 15 year period, Golec & Tamarkin (1991) document an increased bias against underdogs. Further, Humphreys, Paul & Weinback (2013) observed that bettors have a clear predilection toward favorites, and that bookmakers shade lines to exploit this tendency. Relatedly, Durand, Patterson & Shank (2021) analyzed NFL games played between 2003 and 2017 and found that recency bias, or the inclination to overweight more recent outcomes, is real in NFL betting markets, and that the magnitude of wins and losses impacts betting behavior more than mere outcomes (so, for instance, per their observation, the Colts, who amassed the worst average loss margin in the League last year, and whom we like to beat the number in week 1, are unlikely to garner a lot of support from the betting public out the gate—which is likely to result in additional value with Indy plus the points). After evaluating gamblers' against-the-spread NFL picks from 2013 to 2018, Metz & Jog (2022) likewise noted evidence of recency bias.

In week 1, when there is no in-season data on which to base expectations, we hypothesize that bettors' general penchants for siding with superior teams and recent winners manifest as undue support for favorites ATS over teams that missed the prior post-season.

Moreover, given that teams are required to play six regular season division games, and that division champs automatically receive playoff berths, squads are incented to spend ample time learning and game-planning to counter the strengths and exploit the weaknesses of other teams in their divisional grouping. This heightened emphasis results in smaller ATS differences between teams in the same division, versus inter-divisional play, we suppose. As such, a divisional focus exacerbates the profitability of backing week 1 underdogs that sat out last post-season.

To kick off the 2023 season, a historic seven betting picks meet the criteria for this system (since 2003, only the 2020 season saw more triggers per this angle). As such, we will initiate the new NFL season with plenty of action. We list below that sides we are taking, per this system:

Panthers +3 @ Falcons

Bengals @ Browns +2.5

Jaguars @ Colts +3.5

Packers +2.5 @ Bears

Raiders +3.5 @ Broncos

Rams +5.5 @ Seahawks

Bills @ NY Jets +1

Happy betting!!