Point Shaving in NCAA Basketball

Sports Economics is not just about The Wages of Wins. To make that point, I am starting a new feature that spotlights the empirical work of other sports economists, similar to our discussion of the work of Beck Taylor and Justin Trogdon in the book. My first review in this forum will examine the issue of corruption in NCAA men’s basketball.

Justin Wolfers (The Wharton School, University of Pennsylvania) recently published “Point Shaving: Corruption in NCAA Basketball” in the American Economic Review [May, 2006; pp. 279-283]. As the title indicates, the study Wolfers offers examines the prevalence of point shaving in NCAA men’s basketball games.

Point shaving is where players/coaches purposefully keep the point difference between their team and their opponent below the “point spread”. For example on November 29th 2006, Wake Forest played Air Force. The point spread for that game was (-11), with Air Force the favorite. So for one to win a bet on Air Force, the Falcons would have to not only win the game, but also win by more than 11 points (which they did).

Here is where corruption can enter into the picture. Wolfers argues that players could “be bribed not to cover the point spread” (italics in original). Such bribes would be directed towards the favorites, not the underdogs. Bribing underdogs forces these players to commit to losing a game. Giving money to the favorites, though, allows these players to not only win the game but also collect extra money.

Now which favorites should a gambler approach? Wolfers argues that approaching the favorite in a game with a small point spread would be difficult. Players in these contests are going to struggle just to win the game. But in a game with a very large point spread, the favorites should be able to win with greater ease and hence – if point shaving is an issue – we should see these favorites fail to cover the spread more often than one expect just from chance.

Wolfers gathered data on 44,120 NCAA games from 1989 to 2005 and first finds that all favorites beat the point spread in 50.01% of the games. Now that is some pretty good odds making! Yet for strong favored teams — favored to win by 12 points or more — only 48.37% of the 9,244 games covered the spread. Using kernel density estimates of the winning margins, Wolfers shows that the observations are consistent with strong favorites shaving points.

Wolfers does address some factors that would lead to skepticism of his results. One is the change in effort among teams that are winning by large margins at the end of a NCAA basketball game. Wolfers examination of the data suggests this is not an issue.

In concluding the paper Wolfers states that “these data suggest that point shaving may be quite widespread” (italics in the original). From his estimates it is suggested that 1% of all games, or 500 games in his sample, involve gambling related corruption.

Wolfers does note that although one can see in the data a systematic pattern, it is quite difficult to identify specific culprits. Still, this study does give us something to think about next time ESPN broadcasts a game between one of the NCAA’s top teams and a school difficult to find on the map.

– Stacey

For those interested in reading the entire article:

Wolfers, Justin. 2006. “Point Shaving: Corruption in NCAA Basketball”, American Economic Review, 96(2): 279-283.

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