Favre Rumors Move Futures Markets

Guest Post by Andy Weinbach and Rodney Paul

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

Week 1 – On August 2^nd, Las Vegas Hilton had Minnesota as a 4 point underdog against New Orleans, but by noon on the August 3^rd, that pointspread had moved to 6.5.  (As of 2:00p.m. on August 4^th, 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 3^rd, but were back by the morning of August the 4^th, 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 2^nd, the Vikings had a 54% chance to win more than 9 ½ games, but by the morning of the 4^th, 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 2^nd, 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 4^th**.  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 2^nd, 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 4^th, 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 3^rd reports of Favre’s imminent retirement may have been exaggerated, but they did move the NFL futures markets.

Week 1 – On August 2^nd, Las Vegas Hilton had Minnesota as a 4 point underdog against New Orleans, but by noon on the August 3^rd, that pointspread had moved to 6.5. (As of 2:00p.m. on August 4^th, 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 3^rd, but were back by the morning of August the 4^th, 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 2^nd, the Vikings had a 54% chance to win more than 9 ½ games, but by the morning of the 4^th, 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 2^nd, 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 4^th**. 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 2^nd, 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 4^th, 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.

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*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