FEATURE STORY--(BUSINESS WIRE via COLLEGIATE PRESSWIRE)--March 27, 2006--Stevin Smith proved it could happen 15 years ago. Justin Wolfers is aiming to prove it's still happening today.
Smith was an All-Pac-10 point guard at Arizona State in the early 1990s, but he's most famous for taking money to make sure ASU's opponents covered the spread.
The spread is the amount of points that the favorite gives the underdog for betting purposes. Covering the spread means to win the game by more points then you laid or lose by less points then you had taken, a pointspread win.
The tactic is known as point shaving. It's something many people still suspect is going on in sports to this day, but now Wolfers has made it his mission to prove it.
Wolfers' relationship with sports gaming began at an early age. In his mid-teens, he put himself through school in Australia working for bookmakers and professional gamblers. But after receiving a doctorate in economics, this University of Pennsylvania professor who teaches the world's only known course on the Economics of Sports Betting Markets, wondered if he could combine experiences from both jobs to catch people cheating.
"You start by asking yourself the question: If cheating were to occur, which sport would it be in?" says Wolfers. "It has to be a sport where you don't need to bribe many players (to affect the outcome), where probability of detection is low and where athletes and bettors have asymmetric interests. That is, athletes only care about winning the game, while bettors only care about covering the spread."
The assumption is that bettors are paying athletes to throw games. His research focuses on this dynamic, though he suggests that other parties that are able to wager -- such as referees -- may also be involved in point shaving.
Wolfers began his research by taking a look at 44,120 college basketball games played between 1989 and 2005. He chose college basketball because, like Smith's case, only one player has to be bribed to affect the outcome.
College basketball also has a large selection of games each week, many with results that go unnoticed by the general public. Many games also offer the large spreads point shavers need to comfortably win the game and still allow their opponents to cover the spread.
The last reason is the most important. College basketball players want to win, but to attempt to shave a 3-point spread down to one or two is too risky -- it may cost them the game.
For that very reason, Wolfers specifically concentrated on the 9,244 games in his sample where teams were favored by 12 points or more. He says -12 is an arbitrary number, which simply means, "strong favorite." Nonetheless, his results imply there could be more than one Stevin Smith still out there.
While teams favored by less than 12 points covered the spread 50.01 percent of the time, strong favorites covered only 48.37 percent. More significantly, 46.2 percent of strong favorites won outright but failed to cover.
Wolfers reveals two confounding factors in his research. The first one is effort. The effort factor states that teams winning their games by large margins may unintentionally fail to cover by not running up the score or using second string players. The data tells a different story.
Wolfers says his research shows that all teams, no matter what the spread, are equally as likely to run up the score on their opponents. The evidence of point shaving may be found when you look at the results relative to the spread.
We'll use Wolfers' example, a 12-point favorite. Data from those games would show, for instance, that there are an uncommon number of games in which teams win by 10 or 11 points and not enough where they win by 13 or 14. The only reason for this discrepancy, he says, is that a player (or players), well aware of his situation in relation to the pointspread, is purposely trying to push the winning margin below the line.
"Given the player's (approximate) indifference over the size of the winning margin, even small bribes may dominate their desire to decrease the winning margin below 12 points, and this in turn yields large profits for the gambler who has bet accordingly," says Wolfers. "The betting market offers a simple technology for the gambler to commit to paying this outcome contingent bribe: he can simply give the player the ticket from a $1,000 bet on his opponent not covering the spread."
The second confounding factor is betting market inefficiency. This theory suggests that many teams often favored by more than 12 points -- teams like Duke, Connecticut and North Carolina -- are also favored by the betting public. Oddsmakers don't care what the line is if they're getting equal action, so the public's inclination to wager on strong favorites often forces them to move the line higher than it should realistically be.
Overcompensating for the favorite could lead to outcomes in which the favorite barely fails to cover, with fewer strong favorites barely covering. This is because, if oddsmakers do their jobs well (and the data shows they do), then 50 percent of the games should fall on either side the opening number, not the closing one, which Wolfers' study uses.
The data proves this idea to be false. If anything, strong favorites (particularly strong home favorites) tend to win more often than suggested by the spread.
The results of this study are nothing new to the NCAA, though they went about their research in a more qualitative way. In 2004, they published a study entitled 2003 NCAA National Study on Collegiate Sports Wagering and Associated Behavior. Of 388 Men's Division I basketball players surveyed, six (or 1.5 percent) reported either having taken money for playing poorly, or knowledge of teammates who had done so.
Wolfers' study suggests point shaving occurred in nearly 500 games in his sample. That translates to one percent of all college basketball games and five percent of games with a spread higher than 12 points.
As part of a new breed of "forensic economics," Wolfers` research doesn't stop there. A forensic economist doesn't just uncover corruption, he sets out to find a solution. But how do you stop poor college kids from taking money to fix basketball games they're going to win anyway? It's not an easy question answer, and his solution isn't likely to be a popular one.
By Covers.com Writer Jeff Mason
Jeff Mason writes for Covers.com, an online sports information site offering sports gaming commentary and analysis. To interview Jeff, please contact Foghorn Public Relations at 508-877-1235.
