Are the Houston Rockets Going Undervalued in Betting Markets?

Tied 1-1 and heading to Oracle, the Rockets have seen their title odds fall in Vegas. Is it justified, or is it an overreaction worth exploiting?

Over the last few years, the near inevitability of another NBA Finals matchup between the Golden State Warriors and Cleveland Cavaliers (and realistically, of a title for Golden State) has sapped the fun out of chatting about championship contenders and betting on potential underdogs.

This year, the Warriors and Cavaliers are both still very much in the mix to square off for a fourth straight time, but at least they've looked a little less invincible. And now, the Houston Rockets and Boston Celtics each have a legitimate shot at being the first non-Warriors, non-Cavaliers Finals participant since 2014.

At the very least, we're not guaranteed a rematch, so betting the eventual NBA champion is an interesting venture once again.

When it comes to Vegas’ betting odds, they incorporate their fair share of research but they also parallel quite a few opinions of pundits and fans, paying attention to things like experience, past playoff failures, and so on. Our metrics, on the other hand, strip out any bias and deal with the facts, using cold, hard numbers.

Here’s a look at how Vegas’ current title odds (via Bovada) differ from what our algorithms have to say about each remaining team's odds.

TeamBovada Implied Title OddsnF Title OddsDifference
Golden State Warriors66.67%33.17%33.50%
Houston Rockets22.22%34.62%-12.40%
Boston Celtics11.11%17.23%-6.12%
Cleveland Cavaliers7.69%14.98%-7.29%

The first thing that you're going to notice is that Vegas still very much believes in the defending-champion Warriors, putting them at -200 to win the title -- an implied 66.67% chance to take it over the field. We like their chances quite a bit as well, but at a much more conservative share of the pie, as opposed to two-thirds of it.

Most interestingly, if you're looking for value in a potential bet, our metrics still like the Rockets best as eventual champs (a 1.45% edge over the Warriors), despite the fact that they dropped Game 1 of the Western Conference Finals at home, ceding homecourt advantage to Golden State.

It could very well be a long series (our odds-on scenario is Golden State in 6 at 23.74%, followed closely by Houston in 7 at 23.07%), but with both Western Conference squads over 30% one thing is clear: the winner of the Western Conference Finals is going to be a clear favorite in the NBA Finals.

On the other side of the bracket, the Celtics only have a 17.23% chance of winning it all despite their commanding 2-0 lead in the Eastern Conference Finals. That said, at one point we're all going to have to learn a lesson about counting this Boston team out of anything. If you've been betting them as underdogs to this point, you're doing alright for yourself.

Meanwhile, the Cavaliers have a comparable 14.98% chance of winning the title despite that 0-2 hole in the series. Even our algorithm has trouble counting out LeBron James, even if teams have historically won just 19 of 292 times (6.5%) when down 0-2 in a playoff series.

Vegas' love for the Warriors is understandable, but it's to the point where they're going overvalued with the rest of the field undervalued at their respective odds. It could pay off to take advantage now, before the conference finals restart over the weekend and shift the scales once again.