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Keywords

Market Efficiency, Sports Betting, Sports Gambling, American Football, Rules Change, Market Response, Efficient Market Hypothesis

Disciplines

Gaming and Casino Operations Management | Gaming Law

Document Type

Original Research Article

Abstract

Established rules and norms are standard within competitive sports. However, changes are often made to create better functioning contests or improved viewer experiences. We examine the impact of one such change on sports wagering markets. To shorten college football games, starting in 2023, the National Collegiate Athletic Association (NCAA) adopted rule changes that would, in part, enable the game clock to run more frequently. This decision might create games with fewer plays, and scoring in such games might also be lower. We document the impact of these changes and question whether the sports betting markets quickly ascertained the impacts of the rules change. We find that 2023 NCAA games were, indeed, significantly shorter, though the reduction in plays might have been slightly over-anticipated. Most impressively, betting markets efficiently anticipated the impact in points scored as the ‘total’ points predicted shifted downward to a degree matched by the actual results. Even at the start of the 2023 NCAA football season, wagerers were unable to profit on the rule changes by hypothesizing either underappreciation or overreaction to rule changes in the marketplace.

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