“Combining these two observations, the researchers believe that a strong team is more likely to win by a little less than the spread than by a little more than the spread.”

The last sentence can be taken to confirm Wolfers conclusion. Favored teams fail to cover the spread more often than not.

So, if strong, historical correlation exists, one can establish a predictive model, so basically you always bet against the favored team. Of course the problem here is the book makers change the point spread based upon how people are actually betting. The bookmakers always strive for a 50% for and 50% against bet structure, and they do a good job of it.

So how to bookies make money? All they really do is move loser money to winners. What the article fails to mention is the practice of the “vigorish” (a.k.a. vig) – that little 10% fee the bookmaker adds. So betting $100 and winning at even odds will get you back $190.

But I agree with the tone of the article; in this case I think it is more a matter of correlation than causation.