Wednesday, January 16, 2008

Market Odds

Now that sportsbooks have had a few days to smooth out their lines, how do they handicap the NFL Futures market?

Culling from the four major online futures books (Pinnacle, Matchbook, WSEX, Tradesports), we get the following estimates for winning the Super Bowl:

Patriots: 73%
Packers: 14.5%
Chargers: 6.5%
Giants: 6%

What I find most interesting about these percentages is that the Giants, who are 3-1 underdogs in this week's NFC Championship game, seem to have a better chance of winning the Super Bowl (provided they get there) than the Packers do:

Giants: 25% to win NFC, 6% to win Super Bowl (24% chance of SB victory)
Packers: 75% to win NFC, 14.5% to win Super Bowl (19.3% chance of SB victory)

I don't think the bookies really believe that the Giants are more talented than the Packers, even with the assumption that the G-Men win at Lambeau Field on Sunday. So are these odds a reflection of:

a) the Giants' spirited performance against the Pats in Week 17, or
b) an influx of money from the same unsophisticated New York fans that make it profitable to fade the Yankees in the MLB playoffs?

It's hard to tell at this point, but I do think this is a market inefficiency that can be exploited for a small profit, perhaps by betting on the Giants NOT to win the Super Bowl.

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