As most people know — or should know — successful betting is all about finding inefficiencies in the market.
Speculative markets are generally efficient — meaning they reflect all that is known and can be analyzed relatively well. As one of the founding fathers of the Efficient-Market Hypothesis (EMH), Eugene Fama, noted in Foundations of Finance, “The prices of securities observed at any time are based on ‘correct’ evaluation of all information available at that time. In an efficient market, prices ‘fully reflect’ available information.”
If this is true — and there is good evidence to suggest that it is — it stands to reason that inefficient markets are most prevalent in situations where data is scarce or even incorrect.
And this is exactly the case with the start of the NFL season, where last year’s information is largely used to determine the betting lines. Hence, it should come as no surprise that big favorites in week one of the NFL season have underperformed over the years.
In fact, over the past 20 years, favorites by more than a touchdown (7 points) on opening weekend have covered the spread less than 45 percent of the time, meaning that betting on the underdogs in those games has yielded a profit.
This year, there are two teams that qualify as potential plays: the Buffalo Bills (currently +7 ½) and the Tampa Bay Buccaneers (+10).