Markets Chasing Reality



Recently I talked about how badly the market prices have been lagging reality in the NBA playoffs. I thought it would get better. It's may be getting worse!

Now, first off, I want to say that this isn't necessarily a bad thing for sportsbooks...or a sign that oddsmakers don't know what they're doing. The first job for oddsmakers is to protect their employers. If they're not getting one-sided on the wrong side, then they're doing their job.

That being said, we still seem to have these dynamics in play:

*Based on opening lines, and comments to media, oddsmakers were clearly giving too little respect to the Boston Celtics and Los Angeles Lakers in the first two games of their respective conference championships series.

*Based on sharp action (money from professional wagerers), the sharps weren't exactly up to speed either. We're just not seeing the Wise Guys POUND the Celtics and Lakers. They've been surprised by the cover margins as well. I should point out though that the initial moves in the series prices were correct. Sharps did hit Boston and the Lakers at the opening series lines of -300.

*The public sure expected more from Orlando, but they generally back Kobe Bryant and the Lakers at whatever the price is.

To this point, what we're seeing in the conference championship round is a continuation of the earlier rounds. The superior team keeps getting the job done. Nobody zigs. Nobody zags. Nobody says referees or the league office is trying to create drama. There's no drama!

From the last round:

*The market prices (the sum of influences from oddsmakers/sharps/squares) never reflected Orlando's true edges over Atlanta. They never came close!

*The market prices never reflected Phoenix's true edges over San Antonio. Some big differences here as well.

*The market prices failed to respect Boston as they pulled away from Cleveland.

*The market prices undershot the Lakers edges over Utah.

So far in this round:

*The Lakers have won by 21 and 12 against spreads of 6 and 7.

*Boston won by 4 and 3 as underdogs, covering both games by double digits.

When was the last time you watched a game and said to yourself'well, this pointspread was right on the money?' Some totals have been close. But, even then...the Lakers and Suns just played to 235 and 236 against totals of 212 and 216.

This again creates quite a challenge for oddsmakers. Do they adjust their numbers to match reality? What if that creates one-sided action because the'money' isn't reacting to reality? Sure, you could be on the right side and make a killing. But, sportsbooks prefer reasonable risk to in essence'placing a BIG bet themselves' on the game. Taking a position is one thing. Being overly one-sided is another.

You could make the case that oddsmakers haven't adjusted much in the site switches this weekend to Boston and Phoenix.

*Boston is -3.5 as we go to press, which is about what they had been if they had LOST the first two games! Remember, Boston won by 3 and 4 on the road, but is only -3.5 at home.

*Phoenix is -3, which is standard if you're getting +6 or +7 in playoff road games. Home court has been adjusted off the prior lines, but not off the prior victory margins of 21 and 12. Or, really off the road games in the Utah series, which LA won by 1 and 15 points (at +4 and +3).

Maybe reality will start to march back toward the Nevada numbers. Right now, this weekend's lines are out of touch with the reality of the series. It's your job as handicappers to determine whether that'regression' is going to happen...or if you should just keep betting the teams with expressed edges to keep winning.

In past years, betting on reversals was the way to go. This year...expecting things to reverse is just having people drive off a cliff.


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