The Zig-Zag Theory is one of the most well-known sports betting systems, and the concept is simple — take whichever team lost their previous game. The basic theory is that after losing a game, teams will fight ever harder to stave off elimination. This strategy is typically applied to the NBA Playoffs, but I wanted to determine whether it was effective during the MLB Postseason.
My research found that MLB teams coming off a loss have not been profitable, going 148-159 (48.2%) with -17.23 units lost since the start of the 2005 season. Despite this losing record, public bettors haven’t shied away from taking teams who lost their previous game. According to the public betting percentages from Sports Insights, playoff teams coming off a loss have received a majority of moneyline bets in more than 57% of their games.
During the postseason, a seismic shift takes place in the sports betting marketplace and public betting behavior changes dramatically. Casual bettors are increasingly willing to take teams coming off a loss but, unlike in the NBA playoffs, they’re not much more likely to back underdogs. A majority of public bettors have taken the underdog in 19.3% of MLB regular season games and 22.7% of postseason games.
Casual bettors often overreact to recent results. Sportsbooks understand this tendency and shade their lines accordingly to account for the inevitable influx of public money. This oftentimes creates artificially shaded lines that can be exploited by contrarian bettors. Since bettors don’t like taking underdogs and overwhelmingly back teams after a loss, I theorized that there would be tremendous value fading teams who lost their previous game as a favorite.
Past analysis has revealed that NFL teams have been overvalued in “must-win” games, and I speculated that the same trend could be applied for MLB bettors. Casual bettors love to pound teams that need to win in order to keep their playoff hopes alive, but that seems like flawed logic. Just because a team needs to win, doesn’t make it any more likely to win. As the sense of urgency intensifies, the discourse relating to must-win games is similarly amplified.
Between shaded opening lines and line moves based on one-sided action, bettors are forced to take teams facing “must-win” situations at an inflated price. This paves the way for opportunistic bettors to scoop up extra value by playing the unpopular side of the game.
Since 2005, there have been 147 playoff games featuring a team who lost their previous game as a favorite. In the following game, they have received a majority of moneyline bets 99 times. In other words, the betting public likes the losing team to bounce back in over two-thirds of their playoff games.
As you can see from the screenshot below, it’s been highly profitable to fade (bet against) teams who were upset in their previous game.
It’s also interesting to note that the performance of this system is highly influenced by public betting. When a majority of public bettors are backing these teams after an upset loss, this has been an excellent contrarian system. When public bettors don’t have faith that they’ll bounce back, it hasn’t been an effective strategy.
- Receiving ≥50% of moneyline bets: 56-43, +23.04 units
- Receiving <50% of moneyline bets: 26-22, -0.40 units
Clearly, the Zig-Zag theory does not work for MLB playoff betting. In fact, it’s been quite the contrary. The fact that so many bettors subscribe to the Zig-Zag theory has actually created value going against the grain. Based on this research, bettors should be taking teams after a victory — especially if they closed as an underdog in their previous game.
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