The Impact of "Jet Lag" on the AFL Point Spread Wagering Market
AbstractThis paper examines the presence of "jet-lag" effects in the Australian Football League point spread betting market. Fodor and Krieger’s (2014) findings that bookmakers, in NFL betting markets, do not consider efficiently the possible impact of jet lag on team performance, and are unable to take into account the possible existence of a potentially confounding home team bias since in virtually all games in the NFL, one of the teams has an a priori home ground advantage. Schnytzer and Weinberg (2008) took advantage of the distinctive feature of the Australian Football League (AFL), that many fixtures take place on neutral grounds, to demonstrate the apparent existence of a home team bias and the absence of a favorite-longshot bias. We conduct standard econometric tests of market efficiency over games where the home team bias cannot, by definition, exist. We used the 2001-2016 AFL seasons including the final series matches, venues, and betting information data and found no statistically significant line inefficiency in the games played on neutral grounds, regardless of whether the visiting team travels across multiple time zones in either direction or whether neither team requires a flight to reach the relevant stadium. However, line inefficiencies were found in overall games in which the home team enjoys an a priori home ground advantage. Such inefficiencies occur both in games where the visiting team experiences time zone changes when traveling to the game, and in games where the visiting team experiences no such changes. The amalgamated results for both neutral games and home bias games makes clear that jet lag cannot serve as a sole factor leading to inefficiencies but merely if combined with the home team bias. We show that betting on games in various inefficient sub-groups yields returns between 1.26 and 8.07 percent.