Graduation Year

2026

Date of Submission

4-2026

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Daniel Firoozi

Abstract

This paper presents some of the first empirical work examining how the legality of sports betting markets affects the relationship between player performance and sportsbook expectations and adds to a small but growing body of research on how legal sports betting changes player behavior. To achieve this, this paper evaluates the effect legalization of mobile sports betting has on NBA player performance relative to prominent sportsbook proposition line (or “prop line”) expectations. To determine that effect and assess whether these betting expectations impact player behaviors, a player-game level dataset is used that links FanDuel closing over/under lines to real game data for 178 NBA players across five different statistical categories. The dataset spans three distinct player positions (center, guard and forward) and covers games from the 2022 to the 2025 seasons. Using a difference-in-differences model, and exploiting staggered state-level legalization timing, the results show that players in legal markets deviate more from their prop line expectations, though not in any consistent direction.

The primary outcome was the absolute value of the deviation between game performance and the FanDuel closing line (AbsDev). StatDiff measured the directional difference between real game performance and the closing line. Betting legality was associated with a statistically significant increase in AbsDev across three main specifications (beta range 0.266-0.396, all p < 0.05). Player performance in legalized markets deviated further from applicable prop lines in both directions without a consistent directional bias. This effect was most pronounced in the points market (beta = 0.665, p = 0.020), specifically with centers and forwards. For example, Dennis Schroder, who was traded to five different teams from 2022-2025 in markets that both offered and did not offer legalized betting, provides additional evidence and support for the conclusions in this paper.

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