Why You Should Bet on the Houston Rockets to Win the NBA Title

As the NBA season is only three weeks away from resumption, I can’t shake the feeling that it will somehow never fully take off due to the planned bubble not working out (it turns out it is more of a semi-permeable membrane). Alas, I currently remain in denial of this possibility, which meant it was time for me to hop onto Bovada, my sports gambling site of choice, and take a look at the title odds.

After scanning the list, I felt like the ranking of teams was pretty accurate, as the Lakers, Clippers, and Bucks are definitely the three frontrunners. However, the gap in odds between them and the Houston Rockets just didn’t seem logical to me. The formidable uninjured duos in the NBA are Lebron/Anthony Davis, Kawhi Leonard/Paul George, and James Harden/Russell Westbrook. Yet, their respective odds to win are +200, +300, and +1300. This dropoff immediately seems illogical to me. After some thought, I believe I can explain why this has happened, and why despite the seemingly “efficient market” deciding this, a bet on the Rockets is actually an especially cost effective play.

Factor #1: Uncertainty Favors the Underdogs

As a general rule of thumb, uncertainty favors the underdogs. In a year with no completely overpowered superteam like the Kevin Durant-era Warriors, it is just historically a bad idea to go with the favorite. The NBA has too much of a “Rock Paper Scissors” dynamic for the favorite to be an effective bet. For example, the Spurs during the late 2000s and early 2010s historically had a winning record against every team except the Oklahoma City Thunder. At the same time, the Thunder were owned by the Lebron-led Miami Heat, and yet the Heat were quite frankly inferior to the San Antonio Spurs. As a result, the winner of a championship is too dependent on individual matchups, as it is possible that the scissors to a particular team’s paper had unfortunately lost to its own rock in the previous round.

This is, of course, not to say that the best bet is simply the worst team. The best bet in such a situation becomes a team right below the top tier, as this is a solid team that can reasonably capitalize on certain matchups falling in certain directions, rather than needing miraculous wins in multiple rounds. A team like the Dallas Mavericks is not a good play since, regardless if it runs into the Lakers or Clippers, it will encounter issues. Meanwhile, the Rockets stylistically match up better against the Lakers than against the Clippers (the Lakers defense is based on big men instead of perimeter defenders, which will be more challenged against a Rockets small-ball lineup). 

At this point, you might be thinking that Coronovirus definitely adds some further uncertainty, and you would be correct. The virus can strike any player in this bubble at any time, and a missing star player on any of the contenders essentially eliminates the team. This risk is evenly spread out across all teams, and all it takes is a LeBron, Davis, Kawhi, George, or Giannis Antetokounmpo COVID case to drastically change the situation. The Clippers, Lakers, and Bucks are all in big trouble if a player gets sick, and while the Rockets are as well, your upside with the Rockets is uncanny as this random COVID risk presents an open-door possibility unlike any ever. The downside for each team is absolute (a case to a star is a death knell), yet the upside for the relative underdog from another team’s star getting sick is proportionally better.  The current situation reminds me loosely of the XFL betting landscape from earlier this year, where it was pretty easy to make money every single time as there was no way for oddsmakers to know what to do. I personally made profit off of the Over/Under totals in the first couple of weeks, as oddsmakers put almost the exact same number for every single game without having previous data to draw from. Likewise, the NBA has no previous data to draw from. In this new environment, players are also now all evenly rested, arenas are in neutral sites with no fans, and some players have shifted focus towards prioritizing health and social issues. All I can tell you is if the 2019 Raptors were able to beat the Warriors, anything is possible when taking injuries, sickness, and uncertainty into account.

Factor #2: The Rockets are Better than People Realize

The chaos in the past few months has overshadowed the evolution and potency of the Houston Rockets as currently constructed. For starters, the Rockets are the only team in the NBA with two MVP winners in their prime. Yes, Lebron has four MVPs, but that doesn’t make him four times better than a one-time winner. That just means he was marginally better enough to be able to win said MVP more times. Teams with two MVP players in their primes have historically succeeded. When reading about this, I came across this.

Since this was written in mid-2017, Stephen Curry and Kevin Durant have solidified themselves amongst this list as a case study for success. Curry and Durant won MVPs in 2013-2016, and then dominated together in 2017-2019. Harden and Westbrook’s MVPs came between 2016-2018, so the parallel structure of timelines is there as well.

Earlier this season, center Clint Capela was traded away in order to unlock an extreme small ball lineup. This was especially necessary given point guard Russell Westbrook’s poor shooting ability. Westbrook has been having what is, in my opinion, his best season of his career this year. His averages for the current season are 27.5 points 8 rebounds and 7 assists on 47.4% shooting and an EFG% of 49.5%. Looking at raw stats, there seems to be no difference (and maybe even a decrease) from 2016-2019 on the Thunder, when he averaged 26.8 points 10.6 rebounds, and 10.4 assists. However, his shooting percentage and EFG% over that time were 43.3% and 47.4%. The spacing on the Rockets has allowed him to drive to the basket more consistently, as well as attempt fewer three point shots. This change has turned Westbrook from a player who can shoot a team out of a game into a player who carries the team in a shootout more consistently. Since the Capela trade, the spacing has become even more favorable. Capela’s final game for the Rockets was January 29 against the Trail Blazers. Since then, Westbrook is averaging 31, 8, and 6 on 52.5% shooting over 13 games. This is a sizable enough stretch to suggest change. At the same time, Robert Covington has been the player to replace Capela’s minutes. This amounts to a loss in rebounding and interior defense, but an improvement in any other aspect of basketball you can name.

It is worth mentioning that the Rockets probably would have won a championship or two in the past few seasons if not for the Durant Warriors. In fact, they put up a better fight against Golden State than LeBron twice already, losing in 7 and 6 games in the 2018 and 2019 playoffs respectively, whereas James lost in 5 and 4 games in the 2017 and 2018 playoffs respectively. Looking at 2016-2019, out of the teams that retain similar construction and health in 2020, the Rockets were the most successful in the playoffs.

Factor #3: Clear Inefficiencies in the ‘Market’

This final point stems from a realization I came to thanks to extensive research and work in the regular stock market and financial field at large (for both personal investing and college major purposes). I was taught for months in an Intro to Corporate Finance class that the market is efficient, there is no hope to beat it, and the only way to win over time is to invest in mutual funds to reduce certain types of risk. However, it became pretty clear to me that this is not true for one simple reason: enough people in society behave based off of emotions and irrational thoughts to the point that it becomes more important to understand what other people might think in the future, and not what actually may happen. A quick example of where this happened was on a stock called UONE. On June 11, this stock was $1.51 per share. It closed June 19 at over $36, and I remember seeing on Robinhood that during the day it reached almost $50. You may be thinking that some great earnings report news came out with exceptional P/E and Debt to EBITDA ratios. In fact, absolutely no concrete news came out. But what if I told you: “Urban One, Inc. Class A Common Stock, also called Urban One, is a multi-media company, which engages in the radio broadcasting operation that targets African-American and urban listeners”. Suddenly, it becomes clear that this company became 20 fold more valuable for no reason other than the surrounding social climate (no empirical reason). People’s emotional reactions took over, having been told all over social media to help minority owned businesses (which UONE is) to counter systematic and institutional racism. The moral of the story is that if you could somehow predict that people would start overvaluing UONE for no reason other than emotion, you would have benefited greatly.

Circling back to the NBA, one must understand that any team’s betting odds are built as the sum of two factors: Interpretation of empirical data in one shape or another, as well as preconceived notions that are closer to postulate than theorem. This second section is where people’s personal opinions should begin to diverge, and one should be able to find an overvalued or undervalued pick. As with the stock market example, the best way to capitalize is to understand what other people are thinking, and see where this may be incorrect or correct. A simple place to look is by considering the notion of clutch or not clutch. Such a concept in reality does not even exist. If the majority of bettors believe in clutchness (which they do), they will go on to falsely overvalue someone like LeBron James for his 2016 comeback from 3-1 down against the Warriors, while undervaluing both Harden and Westbrook by virtue of their reputations as not clutch in the playoffs. These incorrect assumptions are then baked into the current odds, which you can now capitalize on.

Conclusion

After some time thinking, I am fairly confident in the Rockets as a good play for the upcoming playoffs. When taking into account general myths, truths obscured by the pandemic, and the effects of the pandemic itself, the team becomes a great goldilocks pick in terms of both great return on investment if successful as well as likelihood of actual reward coming to fruition.

Addendum

Since I wrote the main article, it has been reported that Rockets point guard Russell Westbrook has coronavirus. This is obviously ominous and may potentially nullify everything I wrote previously, especially when coupled with the fact that James Harden was planning to arrive in Orlando late with Westbrook. However, there is still optimism in that Westbrook contracted it early on and has the chance to recover. I personally believe that if the Rockets can win their first round series against a team that is not the Lakers or Clippers, getting Westbrook back for the second round should equip them when they need help most. It is hard to predict how the Rockets will close the regular season because of countless factors, but if going off of what is last known, the Lakers and Bucks are by far their toughest matchups. Ultimately, my new prescribed advice is to hold off until the regular season closes, and if the Rockets find themselves a 6 seed or better, I would still follow my original advice.