Why College Basketball’s Rising 3-Point Rate Has Actually Created Value in the Under

The 2018-19 college basketball season boasts the highest 3-point rate in history, with 38.67% of all field goal attempts being from beyond the arc. The 3-point rate has climbed steadily in each of the past five seasons, likely due in part to the Warriors' and Rockets' NBA blueprints over the same span.

So, using our data at Bet Labs, I analyzed college basketball over/under rates since 2005 to evaluate how the betting market has adjusted to the college basketball 3-point revolution.

College Basketball's 3-Point Revolution

As you can see in the chart above, 3-pointers attempted and made are currently at an all-time high since the 2005-06 season. This trend began in 2015-16 and shows little evidence of stagnating from its upward trajectory.

Importantly, the data above reflects 3-point rates for individual teams per game. Because two teams take the court in any given matchup, the combined averages for 3-pointers attempted and made gets doubled. This means that the average college basketball game features 8.07 more 3-pointers attempted per game and 2.75 more 3-pointers made per game than it did in 2014-15.

This elevated 3-point rate has led to much higher game totals over the last four seasons. An average college basketball game this season has 12.62 more total points than it did in 2013-14.

This increased scoring is happening despite essentially zero improvement in 3-point percentage:

Instead, the increase in 3-pointers attempted has resulted in improved effective field goal percentage (eFG%) each season, which in turn leads to more points. Per NBA.com:

Effective Field Goal Percentage (eFG%) measures field goal percentage adjusting for made 3-point field goals being 1.5 times more valuable than made 2-point field goals, the formula for which is: eFG% = ((FGM + (0.5 * 3PM)) / FGA.

The correlation between eFG% and points per game since 2005-06 is r=0.899, which is staggeringly high. Therefore, it is clear that an increase in 3-point rate has directly resulted in increased scoring per game, especially over the last four seasons.

But Has the Betting Market Adjusted?

So, our next question is this: Has the betting market adjusted to this trend?

The answer is: Yes; in fact, the market has actually over-adjusted.

This season, games have gone over at the second-lowest rate since 2005-06. Each season's over-rate has declined since 2015-16, when the 3-point mini-revolution began.

Vegas has over-adjusted to increased 3-point rate by artificially inflating game totals. In part, this inflation preys on the public's intuition, inspiring a kind of cultural hubris in taking the over. Moreover, public bettors love betting overs. They want to watch exciting basketball, after all! So, knowing that the public is more inclined to wager on the over, bookmakers have pushed game totals further than needed.

Contrary to cultural intuition, elevated 3-point rate has actually created value in taking the under in most college basketball games. The under has hit in 51.9% of games this season, 54.9% of games with a closing total of 149 or higher, and 59.3% of games with a closing total of 161 or higher. Indeed, as the game total creeps higher and higher, the under has become increasingly more profitable.

As a fan, continue to enjoy higher-scoring, more efficient college basketball games. But as a bettor, lean towards the under and oppose public sentiment.