Our goal here at The Sports Market is to provide information and parallels between financial markets and the betting markets. It’s our main theory that sports markets (when approached properly) are less efficient than financial markets based on the Efficient Market Hypothesis ("EMH"). Basically, EMH holds that it’s nearly impossible to beat the general financial market because the price already reflects all current information. This theory holds credence based on how governments have set up financial markets to work. Through financial reporting laws, insider trading laws, etc. almost all financial information about public companies is made just that, public. Combine that with the magnitude of the number of smart or “sharp” people in the financial markets and EMH has some credibility.
Luckily, betting markets don’t have those reporting and information laws. Books aren’t required to put out quarterly or financial reports, teams aren’t required to disclose any and all information, and in many cases those in the betting markets are far from Harvard Business School and MIT graduates. The biggest difference is in the discrepancy of information and who’s willing to get it and organize. Where can we turn for up to date and accurate information? Social media, and most notably, Twitter.
The genesis of this blog post was approaching some pre-season NFL games that kickoff in a few days. A key to handicapping those games is who’s going to play and for how long. Where best to get that information? The coaches. Who best to extract that information? The beat writers. It used to be each day or so you could read an article in the morning paper about your teams practice and training camp. Not anymore, we now have Twitter.
Not only does Twitter function as an RSS Feed with beat writers linking to their latest articles, but often they tweet general information they’re hearing and seeing at practice. By following beat writers on Twitter you can get information better and faster to react in the betting market. Is someone hurt? Is someone practicing? Who looks good at practice? Who did the coaches single out in practice? Who were they using in the red-zone? These are questions that are often answered by just following a beat writer as he/she’s observing practice.
For a practical example, let’s look closer at pre-season NFL handicapping. I am of the opinion that a lot of early pre-season NFL games will go under due to the layoff and lack of continuity. This is more likely to happen in places with new coaches, who have bad QBs from top to bottom and with teams more likely to play their starting defense longer. Therefore I narrowed Thursday’s games down to Seattle (bad QBs) at San Diego (new coach) and Arizona (new QB) vs. Oakland (New coach/lack of QB depth).
After identifying these games, I looked to the beat writers to see what more information can be learned, and found this nugget from azcardinal.com‘s Darren Clarke:
With the idea of gaining more information from Twitter to do legal “insider trading” in the betting market and inspired by @beyondthebets college football lists, I’ve compiled a Twitter list of beat writers for all 32 NFL teams. Visit us @TheSportsMarket in our lists section and give it a follow. It is quite likely that in the pre-season and regular season, there will be quite a bit of “insider trading” type information that will help you beat the betting market.
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