2 years ago

Should we exercise the freedom to bet on sports?

Four states have already legalized sports betting in the wake of last May’s Supreme Court decision. While many Alabamians have moral objections to gambling, economics also provides a reason not to bet on sports, namely that betting will prove unprofitable. And this illustrates an important aspect of financial markets in general.

To understand the likely unprofitability of betting, let’s consider the most common football bet, one against the point spread. One team is favored by a given number of points and must win by this number to win a bet; the underdog wins by winning or losing by less than the spread. Bets against the spread should be fair, meaning that the favorite and underdog should be equally likely to win. Bets are not quite fair because sportsbooks deduct a fee so they can make money.

Despite the fees, sports bettors who pick all winners will make handsome profits. And if you think you know football, you might think you can pick winners for at least some games. But sports’ entertaining unpredictability also makes picking just winners impossible. And because of the betting lines, you cannot profit by just betting on the Alabama Crimson Tide, who win almost every game.

If point spreads are accurate, bettors will not be able to pick enough winners to profit. Accuracy does not mean that the spread exactly predicts each game, but is better at forecasting outcomes than any other method.

Is this really true? Dozens of published papers have found that sports betting lines accurately predict outcomes. Alternatively, economists try to find profitable betting strategies given the sportsbooks’ fees; the published research yields few winning formulas.

Accurate point spreads yield a surprising implication: experts should not do any better than amateurs or luck in picking winners. Flipping a coin to decide who to bet should be as reliable as a super handicapper’s “lock of the year.”

This theory of efficient financial markets was first developed for the stock market. The price of a company’s stock should be our best forecast of its future performance. Some stocks clearly deliver tremendous returns: a $1,000 investment in Amazon or Netflix in 2007 would have been worth $12,000 and $51,000 respectively a decade later. But who knew to invest in Amazon in 1997, Apple in 1978 or General Motors in 1920? Warren Buffet passed on investing early in Amazon.

How do financial markets accomplish this? Once markets exist for stocks, bonds, sports bets, gold, Bitcoin, or anything else, millions of investors can invest where they see value. If you think that Amazon’s stock is still underpriced, then buy now. Of course, someone will only sell to you because they do not think Amazon is undervalued at today’s price. Stocks, gold, and football point spreads must all be priced to balance the number of buyers and sellers most of the time.

One guiding principle for financial research has been that it cannot be easy to get rich. If it were easy to get rich and remained so over time, then everyone would be rich. A satisfactory theory of financial markets must reflect this reality. Prices generally quickly incorporate news affecting a company’s or team’s prospects.

Why then bet on sports? Some people enjoy having action on games and sweating their bets. Betting on your favorite team can also signal your loyalty. Finally, some people, I think, like the challenge of trying to beat the market by finding some heretofore unrecognized pattern. Market efficiency does not mean that nothing remains to be learned about teams’ performance.

The potential to make money in stock, bond, futures and foreign currency markets motivates similar efforts by analysts on Wall Street and across the world. This research further improves financial markets.

Even should Alabama legalize sports betting, I won’t be placing many bets. I would be denying the power of markets if I did. Studying economics pays off, sometimes just by avoiding unprofitable decisions.

Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University.

17 mins ago

Two charged with capital murder in slaying of Moody PD officer

Two suspects have been charged with capital murder in the case of slain Moody Police Department officer Stephen Williams.

The two suspects are 27-year-old male Tapero Corlene Johnson and 28-year-old female Marquisha Anissa Tyson. Both are from Birmingham and will be eligible for the death penalty if convicted.

At a press conference Friday, St. Clair County Sheriff Billy Murray described said the investigation is still continuing and described it as “complex and intense.”

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Williams was posthumously promoted to lieutenant at the press conference on Thursday by Moody Police Chief Thomas Hunt.

Hunt said Williams had remarked at times that he would like to achieve the rank of lieutenant someday, and now he will forever be known as Lt. Stephen Williams.

The District Attorney for St. Clair County said the two suspects had been in police custody since the shooting on Tuesday night.

Investigators say they have determined that Johnson and Tyson fired weapons at Williams who was responding to a disturbance at a Super 8 Motel.

A GoFundMe page to help Williams’ family has been raising money in recent days.

Williams served the public as a police officer for 23 years before being killed in the line of duty this week.

Governor Kay Ivey commented on the incident earlier in the week, saying Williams “died a hero.”

Henry Thornton is a staff writer for Yellowhammer News. You can contact him by email: henry@yellowhammernews.com or on Twitter @HenryThornton95

1 hour ago

Data shows Alabama nursing homes performing better than national average for COVID-19 cases, deaths

The Centers for Medicare and Medicaid Services on Thursday released facility-specific COVID-19 data for nursing homes across the United States, and an analysis of the data shows Alabama fairing better than the national average.

The data was collected on a mandatory basis by the CDC and currently covers through the week ending on May 31.

Nationwide, the average number of confirmed coronavirus cases per 1,000 residents in nursing homes was 91.2, while the average number of deaths from the disease per 1,000 residents was 30.2.

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In Alabama, both of those numbers were significantly lower than the national average, at 64.9 and 20.9, respectively.

Alabama Nursing Home Association president and CEO Brandon Farmer issued a statement on the data’s release.

“According to the Centers for Medicare and Medicaid Services (CMS), Alabama nursing homes report fewer cases of COVID-19 per 1,000 residents and fewer deaths from COVID-19 per 1,000 residents than the national average,” he confirmed.

“Because we are on the front lines of fighting COVID-19, we expect the number of COVID-19 cases to rise as more tests are administered and the data is added to the Centers for Disease Control and Prevention (CDC) system. The Alabama Nursing Home Association hopes this data will be used to prioritize resources for skilled nursing facilities,” Farmer advised.

“Alabama nursing homes have been transparent from the beginning of the COVID-19 pandemic,” he continued. “Our members have reported cases to their local county health department and the Alabama Department of Public Health from the start. In May, we began reporting cases to the CDC. Facilities also inform residents and their family representatives and employees of cases in their buildings. We are following the guidelines set forth by the multiple state and federal agencies that regulate our sector. No other business or health care provider reports COVID-19 cases to more government entities and people than nursing homes.”

Nationwide, nursing homes reported 95,515 confirmed COVID-19 cases and 31,782 deaths through May 31. Nursing homes in Alabama reported 1,000 confirmed cases and 335 deaths.

Moving forward, CMS will release the next round of data on June 18. After that date, new data should be released weekly.

“The Alabama Nursing Home Association and its members will continue to work with local, state and federal leaders to address the needs of nursing home residents and employees,” Farmer concluded.

The CMS data can be viewed here.

As of Friday at 2:00 p.m., the Alabama Department of Public Health reported 19,073 total confirmed COVID-19 cases in the state, with 672 deaths.

Sean Ross is the editor of Yellowhammer News. You can follow him on Twitter @sean_yhn

2 hours ago

NFIB survey of Alabama business owners shows ongoing COVID-19 related fears

A new study from the National Federation of Independent Businesses (NFIB) showed that an overwhelming majority of proprietors are nervous about several aspects of how the coronavirus pandemic is affecting their business.

Yellowhammer News reported in the first week of May that 70% of the NFIB’s membership across the United States was concerned about individuals filing frivolous lawsuits claiming a business had caused them to catch COVID-19.

A poll from the Alabama division of NFIB this week shows that 69% of businesses in the Yellowhammer State remain nervous about lawsuits, and roughly equal amounts are worried whether customers might come back and that it may prove difficult to comply with ongoing regulations.

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The top results of the survey as follows:

  • 70% of owners say they’re very or moderately concerned about getting customers back.
  • 69% are concerned about managing the health and safety of their customers; 66% are concerned about managing the health and safety of employees.
  • 69% are concerned with having to comply with new regulations related to the coronavirus.
  • 68% are concerned about finding an adequate supply of supplies such as hand sanitizer and disinfectant.

NFIB state director Rosemary Elebash told Yellowhammer News Friday that the survey was administered to businesses in every county and every city with a significant population.

“It wasn’t just NFIB members,” Elebash added about the survey, saying the group had worked with a number of trade associations to increase the amount of responses.

The NFIB also continues to strongly support Senator Arthur Orr’s (R-Decatur) bill to grant civil immunity from COVID-19 lawsuits to businesses in Alabama.

Elebash noted in a release that Orr’s bill would be “one of NFIB’s top priorities” if Governor Kay Ivey calls a special session later in the year.

Henry Thornton is a staff writer for Yellowhammer News. You can contact him by email: henry@yellowhammernews.com or on Twitter @HenryThornton95

2 hours ago

Tuberville: Nationwide unrest linked to ‘education and jobs’

Many argue there is much more to the civil unrest across the nation than the lone incident in Minneapolis involving the death of George Floyd while in the custody of the police department. Former Auburn head football coach Tommy Tuberville indicated he agrees with that.

During an appearance on Huntsville WVNN’s “The Jeff Poor Show,” Tuberville, a candidate for U.S. Senate, said based on his interactions with people on the campaign trail, there is a longing to get back to a sense of normalcy in the wake of the heights of the COVID-19 pandemic.

“I speak to eight to ten places a day — groups are worried, obviously. I think they’re getting a little more confident they can go out and be around other people,” he said. “And we’re just hoping we can just put this pandemic, and it is a problem, it is serious — again, you’ve got to protect yourself. It’s not going away. It is still here, especially if you’re having health problems and those things. That will go away — but then all of a sudden we get hit with this civil unrest, and again — we’re all Americans. We’re all in this together. We’ve got to find a solution.”

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Tuberville said he is asked for his thoughts by voters while on the trail, to which he said he points to “education and jobs,” and the erosion of the American middle class.

“I had a group ask me today, ‘Coach, what do you think the problem is?’ Education and jobs. We don’t have a middle class anymore,” Tuberville stated. “There are people out there that don’t have the opportunity to advance in this country like they want to. This is not a black issue. This is not a white issue. This is an American issue. We shipped our jobs to China, bottom line. We’re finding out more and more about that every day, and we’ve got to give the opportunity for young men and women to have a chance to grow in this country, and give them a fair chance. Unfortunately, our middle class has dissipated. We have more drugs in this country, and a lot of people take other options. We got to understand — we’re all in this together, 340 million people. We’re either going to make it together or not make together.”

@Jeff_Poor is a graduate of Auburn University and the University of South Alabama, the editor of Breitbart TV, a columnist for Mobile’s Lagniappe Weekly and host of Huntsville’s “The Jeff Poor Show” from 2-5 p.m. on WVNN.

3 hours ago

City of Mobile temporarily removes Admiral Raphael Semmes statue from downtown

The City of Mobile has removed the statue of Admiral Raphael Semmes from downtown, however this appears to be a temporary action.

Mayor Sandy Stimpson tweeted that the statue was removed at his direction in the early morning hours of Friday. The base of the monument still remains.

“On June 4, 2020, I ordered that the statue of Admiral Raphael Semmes be moved from its location at the intersection of Government and Royal streets in downtown Mobile,” the mayor said. “The task was completed this morning, June 5. The statue has been placed in a secure location.”

“To be clear: This decision is not about Raphael Semmes, it is not about a monument and it is not an attempt to rewrite history,” he continued.

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“Moving this statue will not change the past. It is about removing a potential distraction so we may focus clearly on the future of our city. That conversation, and the mission to create One Mobile, continues today,” Stimpson concluded.

Per WKRG, City of Mobile spokesperson George Talbot clarified that the removal of the statue is temporary. Next steps are to be announced at a later date.

This comes after the statue was defaced earlier this week. The City promptly cleaned the statue after that incident.

Semmes commanded the CSS Alabama in the Confederate Navy. He died in Mobile in 1877.

Originally dedicated in 1900, the statue of Semmes is covered by the Alabama Memorial Preservation Act. The City could potentially face a $25,000 fine for removing the statue.

Semmes is a member of the Alabama Hall of Fame. The City of Semmes in western Mobile County was named after him, as was The Admiral Hotel (a Curio by Hilton property) in downtown Mobile.

Sean Ross is the editor of Yellowhammer News. You can follow him on Twitter @sean_yhn