The ‘zig-zag’ has not turned a profit for NBA bettors in 10 years

May 3, 2011 6:02 AM

Two weeks ago, I went in depth researching the hard numbers behind the infamous "zig-zag" theory, the NBA playoff betting strategy. Zig-zag bettors spent two decades cashing in before the betting markets finally caught up.

But, as is always the case with any "blind" betting strategy, eventually, the markets can and will catch up, negating whatever edge originally existed.

It’s very impressive to see a blind betting strategy work consistently for two decades. Remember, blind strategies require no handicapping prowess whatsoever. The profits earned from following the zig-zag theory didn’t require any game watching, box score analysis or advanced metrics consideration.

All bettors had to do was to bet on the team that lost their previous playoff game in straight up fashion – it’s hard to get much simpler than that. And bettors were able to earn a profitable return for multiple decades using that simple formulaic method.

As I described in last week’s follow-up article, the betting marketplace has caught up to the zig-zag. The strategy hasn’t produced a profit in the last 10 years. In game after game, and series after series, we’re seeing adjustments – a point or two on the opening number; another point or two from the line moves.

The zig-zag strategy/betting philosophy has been fully encapsulated by both bookmakers and bettors. The theory is well known. It’s simple to understand. And the betting markets have become completely aware of this blind betting strategy. That’s why blindly betting the zig-zag is no longer profitable.

From 2001-2010, given the opportunity to line shop for the best number, bettors still cashed only 51% of their wagers betting the zig-zag in every game following Game 1 of the series. In the first round of the 2011 NBA playoffs, zig-zag bettors lost money once again.

In the Atlanta-Orlando series, zig-zag went 3-2 against the spread. In Chicago-Indiana, zig-zag went 3-1 ATS. Boston-New York saw a 1-2 ATS mark for zig-zag bettors, with the Knicks’ Game 2 cover at Boston the lone zig-zag cash for the series. Miami-Philadelphia was 1-3 ATS for zig-zag bettors, the lone victory coming with the 76ers Game 4 upset win.

Blindly betting the zig-zag in the East produced an 8-8 record this year.

In the Western Conference, the Mavs-Blazers produced a 2-2-1 ATS mark betting the zig-zag in the first round. It was the exact same story in the Memphis-San Antonio series, a 2-2-1 ATS mark for the five games following the Grizzlies’ Game 1 upset over the Spurs.

The Lakers-Hornets was 2-3 for zig-zag bettors. Oklahoma City and Denver didn’t cash a single zig-zag ticket; 0-3-1 ATS. Add ‘em up and we’re looking at 6-10-3 ATS for the West; 14-18-3 ATS for the entire first round.

Yes, we’re talking about a small sample size when we discuss the 2011 postseason’s first round. But when we tack it on the back of the 51% 10-year sample, the irrelevance of the zig-zag theory in practice couldn’t be more obvious. If we’re going to look for blind betting strategies for the next decade, we’re going to have to find something better than the zig-zag to produce profits in the modern era.

Last week, I brought up the "mispriced teams" concept, looking for teams that were incorrectly priced at the start of any given playoff series. In the modern era of sports betting, there are more parallels with Wall Street than ever. When a stock or commodity is mispriced, traders pounce and eventually bring the price into a more appropriate range. This process doesn’t happen overnight – it can take weeks or months before market corrections take place.

It’s not that hard to understand that the price of the Oklahoma City Thunder can be compared to the price of gold, or of IBM stock. And, as has been the case in every recent playoff season, finding and pouncing on mispriced teams has produced enormous dividends so far in 2011.

Four of the eight first round series produced ATS results of 75% or better for one of the two teams. Grizzlies bettors went 5-0-1 in their series against the Spurs, including a pair of cashes by two points or less (Games 2 and 3). Had the Grizzlies been priced appropriately, those would not have been ATS wins for Memphis!

Dallas was another "mispriced" team against Portland. Mavs backers, like Grizzlies backers, went 5-0-1 ATS for the series, including a Game 3 push and a Game 4 winner by two points. Had Rick Carlisle’s squad been power rated appropriately, the Blazers would have cashed at least two winning bets in that series.

Indiana-Chicago was another ‘mispriced teams’ series. The Bulls were in the range of 40-1 favorites to win the series, a clear indication of how little respect Indiana was getting from the betting markets. But the Pacers hung tough in each of the first four games before their Game 5 second half meltdown – the only time in the entire series that the Pacers trailed by double digits.

Blindly betting Indiana in every game of that series produced a 3-1-1 ATS mark. In this instance, even a three point power rating adjustment between these two teams at the start of the series wouldn’t have changed much, with only Game 3’s push coming in close to the point spread.

Last, but not least, the Atlanta Hawks were severely mispriced in their series against the Orlando Magic, cashing at a 5-1 ATS clip. The Hawks were underdogs in all three of their home games against Orlando (+1.5 or +2 in every game), and they won all three times by four points or less, cashing every ticket as a result. When you’re on the right side of these mispriced teams, you’ll cash plenty of bets in similar fashion.

So how do we identify mispriced teams ahead of time in any series? There is no rote formula here, no auto-plays, like the zig-zag betting system produces. Instead, it requires at least some basic concept of handicapping to get on the right side of these mispriced squads. You’ll need to buy low and sell high, obviously. What works in identifying under and over valued squads?

How about this strategy – Just bet on the Game 1 winner in every remaining game of the series? Or this one – bet the lower seed in every series tied 1-1 after two games as they return home? Or this one? Bet on the team ahead 2-0 in the series as they hit the highway.

I’ve taken a short sample (the last three years), and I’ve ignored the NBA Finals (a different format than the 2-2-1-1-1 from the other 14 playoff series each year) for the purposes of this study. Here’s what we’ve found out about the theories listed above.

This year, betting on the ATS winner of Game 1 in every remaining game in that series – another ‘blind’ betting strategy – has produced a 20-11-4 ATS results. All the profits from this strategy came from the mispriced teams, but Game 1 clearly showed who those mispriced teams actually were.

Betting on the lower seed in every series tied 1-1 for every remaining game produced 8-4-1 ATS in the first round this year. And betting on the team with a 2-0 series lead was 8-4-3 ATS.

Last year, betting on the ATS winner of Game 1 in every remaining game in that series was a significant money loser. That strategy went 12-22 ATS in Round 1, 7-7 ATS in Round 2 and 5-5 ATS in the conference finals.

In 2009, betting on the ATS winner of Game 1 in every remaining game in that series produced a small profit. The numbers show 21-15-1 ATS in Round 1, 11-7-1 ATS in Round 2 and 6-4 ATS in Round 3. When we add it all up, the three year sample shows an 80-71-5 ATS mark; a slight profit, but nothing to get excited about.

Betting on the lower seed in every series tied 1-1 for every remaining game was another modest money winner – 35-27-23 ATS over the past three seasons.

But the real moneymaker from this grouping comes in the series when one team has dominated the other, taking a 2-0 series lead. Betting ON that team with the 2-0 series lead in every remaining game went 18-13 ATS in 2010, 10-2-1 ATS in 2009 and 8-4-3 ATS so far this year. Add it all up and it’s on a 36-19-4 ATS run over the past three seasons; worth noting and paying attention to as these second round 2011 playoff series heat up this week.