Illinois economist Dan Bernhardt and University of Maryland co-researcher Steven Heston dispute a widely publicized academic study that claimed to find statistical evidence of point shaving among college basketball teams that are strongly favored by Las Vegas bookmakers.
Photo by L. Brian Stauffer
CHAMPAIGN, Ill. - A University of Illinois economist disputes a widely publicized academic study that claimed to find statistical evidence of point shaving among college basketball teams that are strongly favored by Las Vegas bookmakers.
Dan Bernhardt, an Illinois professor of economics, and co-researcher Steven Heston, a professor of finance at the University of Maryland, conclude that the statistical anomalies identified by the previous study "are intrinsic to the game itself and are not indicative of an epidemic of gambling-related corruption" in college basketball.
Point shaving is the practice by a favored team of winning games by less than the bookmakers' point spread in order to yield profits for gamblers who bet on the underdog. Because bets are based on the margin of victory rather than on wins and losses, players can cheat by missing a basket or two and still win the game.
Justin Wolfers, an economist at the University of Pennsylvania, received widespread media attention last spring when his "Point Shaving: Corruption in College Baseball" appeared in the American Economic Review.
Using a sample of 44,120 NCAA Division I basketball games between 1989 and 2005, Wolfers documented that a team favored by 14 points was about 6 percent more likely to win by fewer points than to win by more points. Wolfers concluded that strong teams missed the spread too often to be accounted for by chance.
"This finding, if correct, would mean either that the very best NCAA teams shaved points, for they comprised the bulk of the strong favorites, or else that a really high percentage of college players occasionally engaged in criminal activity by missing a basket or two to blow the spread without blowing the game," Bernhardt said in an interview.
"Either possibility," the Illinois economist added, "would indicate remarkable levels of criminal activity and would call for radical policy reform and policing in college sports."
Bernhardt and Heston, however, wondered whether the patterns discovered by Wolfers were due to player corruption or the nature of the game itself.
To answer this question, the researchers used two approaches. First, they looked at the changes in the point spread between the opening and closing lines, which was not done in the Wolfers study. The opening line is the point spread that bookmakers initially quote, and the closing line is the spread quoted just before the game begins.
They identified 4,350 games in which the closing spread was wider than the open spread, and 4,956 games in which the spread either remained unchanged or fell.
Their hypothesis was that if the opening line on a favorite team increased between the opening and closing spreads, more money was being bet on the favorite than the underdog, making point shaving implausible. On the other hand, in games where the spread fell between the opening and closing lines, then gamblers betting on the underdog may have induced members of the favored team to intentionally play badly in order to win by less than the spread.
Finding very similar patterns regardless of whether the point spread rose or fell, the researchers report no statistically significant evidence of point shaving.
But this still left open the possibility that gamblers bet on small scales that did not move the lines or that they simply spread their bets out cleverly enough so that the lines did not move.
To examine these possibilities, Bernhardt and Heston investigated games among non-elite Division I teams for which Las Vegas bookmakers set no betting lines because the games drew almost no recreational wagering.
In place of the point spread, the researchers used the differences in Sagarin ratings of team strength adjusted for home court advantage to construct a measure of the amount by which one team should be favored.
"We compared the frequency by which teams won by a little less than this estimate versus the frequency with which they beat the estimate by a little, and again we found that they won more often by a little less than by a little more," Bernhardt said.
"In other words, the statistical properties that Wolfers identified in his paper seem to be intrinsic to the game of basketball itself, occurring independently of whether there are incentives to point shave, and are not indicative of an epidemic of gambling-related corruption."
What then caused the "asymmetry" in winning margins detected by Wolfers?
Bernhardt and Heston offered two reasons in their working paper:
• Teams ahead by a small margin hold the ball at the end of a game, strategically reducing the number of scoring opportunities for both teams in order to maximize the probability of winning. "This strategy has the effect of reducing the chances of beating a large spread," they noted. "In contrast, a team up by a large margin is sure to win and will not hold the ball, thus raising the frequency of blow outs."
• The impact of foul troubles on strong and weak teams is likely to have a different impact on the final score. "Strong teams tend to be deeper, with a stronger bench, so if the top players get in foul trouble, the team is still likely to win by a small margin," Bernhardt said. "But the same it not true for a weak team. If a weak team gets in foul trouble, it is likely to get blown out because its secondary players are weak."
Combining these two observations, the researchers believe that a strong team is more likely to win by a little less than the spread than by a little more than the spread.
Their working paper, "No Foul Play: Honesty in College Basketball," can be accessed online in pdf form.