Why NFL prop bets are mispriced

This season, we began sharing NFL QB passing yard prop bets. Prop bets are known to be a soft spot in the armor of a sportsbook, but a high hold, low limits, and inconsistent offerings have historically kept us on the sidelines. To be transparent, this is one of our first forays into seriously betting into the prop market, but after witnessing record scoring in the NFL this season, we decided to dig into yardage totals. What we found was a surprisingly inefficient props market that 1) shades against traditional bettor biases, 2) fails to capture injury and substitution (benching) risk, 3) doesn't account for the skew in the distribution of passing yards, and 4) misses the changing relationship between points and yards. Let's walk through these one-by-one.

1) BETTOR BIASES: It's commonly understood that the majority of recreational bettors enjoy betting overs. Life is too short to bet the under. As a result, sportsbooks often shade their lines higher for props to increase their profits on Over bets. This season, the average team passing yards per game is 264.5. The average line at DraftKings for all of the QB passing yardage props during Week 6 was 264.8. This might not seem like a big difference, but consider that the Seattle Seahawks (300.4 passing yards per game), Los Angeles Chargers (280.6), Las Vegas Raiders (288.4), and New Orleans Saints (273.8) were all on bye.

2) TOTAL YARDS VS STARTER YARDS : We are comparing team passing yards to the lines set by the sportsbook above. However, the prop wagers are for specific players, not the team as a whole. Because of injuries, trick plays, and in-game benchings (sorry Mitch Trubisky), aggregate team totals exceed the passing yards of the starting quarterback. The average passing yards for a starting quarterback this season is 256.5 yards. 

3) DISTRIBUTION (AVERAGE VS MEDIAN) : Using the average passing yards for starting quarterbacks does not reflect the specific bet we are considering. The bet is binary - over or under - and thus it doesn't really matter if you win by 1 yard or 100 yards for the purposes of grading the bet. The more appropriate metric we should look at is median passing yards, which is the midpoint of the entire distribution of outcomes, where half of the outcomes are above the target and half are below. Due to an upward skew in the distribution of passing yards, the average generally exceeds the median, because it is more likely that a starting QB throws for 500 yards than 0 yards (and generally there is a lower bound of zero). The median passing yards for starting quarterbacks this season is 252 yards.

4) MORE SCORING = MORE PASSING YARDS? IT'S COMPLICATED: There has been plenty of discussion of the increase in scoring this season. However, much of this increase can be attributed to changes in officiating. As a result, the relationship between passing yards and points is changing. Over the past 10 seasons, the ratio of yards to points has averaged 16.0 with a standard deviation of 0.2 (high of 16.3 in 2011, low of 15.6 in 2013). So far in 2020: 14.9. The implications are that passing yards are not increasing proportionately with points. It's hard to tell if this is the new norm, but for the time being, it seems like a pretty safe bet that yards will lag scoring.

All of these small details add up to a big edge in betting the under on QB passing yardage prop bets. Going forward, we will almost exclusively target unders. To get our prop bets, click here to sign up for our newsletter. We will deliver our bets straight to your inbox before every game.

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