Casual bettors and sentiment bias in NBA and NFL betting

Sentiment bias, defined as investment decisions made for reasons unrelated to fundamentals and related to popularity, represents a common research topic in finance and economics. Empirical research on sentiment bias frequently uses data from sports betting markets. While research generally finds evidence of sentiment bias, in particular, due to team popularity, the prevalence of this bias among fans and bettors in many sports remains unclear and identification of markets with relatively larger numbers of bettors with sentiment bias poses empirical challenges. We analyse outcomes in betting markets for games played in two North American team sports leagues, the National Basketball Association (NBA) and National Football League (NFL) from the 2012-13 to 2016-17 seasons and investigate how game timing, in terms of games played on weekdays and weekends, may affect the presence of bettors with popularity-based sentiment bias. Probit model estimates explaining the probability that a bet on a team wins indicate patterns consistent with the presence of bettors with sentiment bias in the markets for betting on games in the NFL but not in the NBA, and the presence of more such bettors for NFL games played on weekends.