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Favre Rumors Move Futures Markets

2010 August 7
by Guest

Guest Post by Andy Weinbach and Rodney Paul

August 3rd reports of Favre’s imminent retirement may have been exaggerated, but they did move the NFL futures markets.

Week 1 - On August 2nd, Las Vegas Hilton had Minnesota as a 4 point underdog against New Orleans, but by noon on the August 3rd, that pointspread had moved to 6.5.  (As of 2:00p.m. on August 4th, LVHilton still lists Minnesota as a 6.5 point underdog, while 5Dimes lowered the pointspread back to 5.5 shortly after noon.)

NFL Futures bets on the Minnesota Vikings were unavailable on August 3rd, but were back by the morning of August the 4th, with a likely Favre absence baked in to the Minnesota Vikings futures odds.

Regular Season Wins - For regular season game wins, based on posted odds from August 2nd, the Vikings had a 54% chance to win more than 9 ½ games, but by the morning of the 4th, that likelihood had fallen to 45%*.  All Futures odds taken from BETUS.com, a well-known online sportsbook.

Odds to Win NFC North - On August 2nd, odds showed the Vikings with a 38% (+130) chance of winning the NFC North, with that number dropping to 32%(+175) by the morning of August 4th**.  The suggested probability of Green Bay winning the NFC North rose from 39% to 44% (+125, +100 respectively) during that period, though both have partially moved back since Favre’s public comments this morning, with Minnesota back near 35% and Green Bay back near 42%.

Odds to Win the NFC – On August 2nd, subjective probability for Minnesota to win the NFC (estimated based on posed odds for all teams) was 10.9% (Vikings +650).  On the morning of August 4th, the likelihood that the Vikings would win the NFC had fallen to 9.1% (Vikings +800), while Green Bay’s chances appeared to increase, from 10.9% to 11.6% (+650, +600 respectively).  By noon, however, Favre’s denial of certain retirement pushed Minnesota back up to 9.7% (+750) and Green Bay back to 10.9% (+650).

Though Favre’s apparent indecisiveness may be frustrating to some, the markets suggest that Minnesota’s chances for success this season improve as the probability of Favre playing increases.

*Calculations based on methodology used in Gandar, Zuber, Johnson, and Dare (2002) – Reexamining the betting market on Major League Baseball games: is there a reverse favourite-longshot bias?  Applied Economics, 34, 1309-1317.  This article has a great discussion on calculating subjective probabilities for odds based sports betting.

**Subjective probabilities based on calculations used in pari-mutuel wagering studies such as those used in Gramm, M. and Owens, D. H. (2006).  Efficiency in Pari-Mutuel Betting Markets across Wagering Pools in the Simulcast Era.  Southern Economic Journal, 72(4), 926-937.

August 3rd reports of Favre’s imminent retirement may have been exaggerated, but they did move the NFL futures markets.

Week 1 - On August 2nd, Las Vegas Hilton had Minnesota as a 4 point underdog against New Orleans, but by noon on the August 3rd, that pointspread had moved to 6.5. (As of 2:00p.m. on August 4th, LVHilton still lists Minnesota as a 6.5 point underdog, while 5Dimes lowered the pointspread back to 5.5 shortly after noon.)

NFL Futures bets on the Minnesota Vikings were unavailable on August 3rd, but were back by the morning of August the 4th, with a likely Favre absence baked in to the Minnesota Vikings futures odds.

Regular Season Wins - For regular season game wins, based on posted odds from August 2nd, the Vikings had a 54% chance to win more than 9 ½ games, but by the morning of the 4th, that likelihood had fallen to 45%*. All Futures odds taken from BETUS.com, a well-known online sportsbook.

Odds to Win NFC North - On August 2nd, odds showed the Vikings with a 38% (+130) chance of winning the NFC North, with that number dropping to 32%(+175) by the morning of August 4th**. The suggested probability of Green Bay winning the NFC North rose from 39% to 44% (+125, +100 respectively) during that period, though both have partially moved back since Favre’s public comments this morning, with Minnesota back near 35% and Green Bay back near 42%.

Odds to Win the NFC – On August 2nd, subjective probability for Minnesota to win the NFC (estimated based on posed odds for all teams) was 10.9% (Vikings +650). On the morning of August 4th, the likelihood that the Vikings would win the NFC had fallen to 9.1% (Vikings +800), while Green Bay’s chances appeared to increase, from 10.9% to 11.6% (+650, +600 respectively). By noon, however, Favre’s denial of certain retirement pushed Minnesota back up to 9.7% (+750) and Green Bay back to 10.9% (+650).

Though Favre’s apparent indecisiveness may be frustrating to some, the markets suggest that Minnesota’s chances for success this season improve as the probability of Favre playing increases.

——————————————————————-

*Calculations based on methodology used in Gandar, Zuber, Johnson, and Dare (2002) – Reexamining the betting market on Major League Baseball games: is there a reverse favourite-longshot bias?  Applied Economics, 34, 1309-1317.  This article has a great discussion on calculating subjective probabilities for odds based sports betting.

**Subjective probabilities based on calculations used in pari-mutuel wagering studies such as those used in Gramm, M. and Owens, D. H. (2006).  Efficiency in Pari-Mutuel Betting Markets across Wagering Pools in the Simulcast Era.  Southern Economic Journal, 72(4), 926-937.

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Rodney Paul is Professor of Economics at St. Bonaventure University

Andy Weinbach is Assistant Professor of Economics at Coastal Carolina University

One Response
  1. Frank permalink
    August 9, 2010

    Surprised the lines move all that much at all.
    I feel like the general consensus among most was that the initial news of his retirement was premature and it was a non-news item, as it has been the last 3 years when it’s come up.

Comments are closed.