The amount of hype headed into UFC 193 was unusual for a number of reasons. The fight card was set to be witnessed by the largest live audience in the history of MMA, and so was generously stacked with double title fights. And yet none of the participants in the in the final two fights of the night were even on the UFC roster as recently as 2012. In fact, only a single main card fighter (Stefan Struve) had more than three years in the UFC. Still, the event was covered with unusual depth across mainstream media thanks almost entirely to the star power of Ronda Rousey. The female fighting phenom had seen her legend build to unprecedented heights, and she had still delivered one more spectacular performance after another, all under the rude gaze of public scrutiny. Her most recent outing had required her to head to Brazil in her first away-game matchup against a local fighter, only to set a new record as the UFC’s biggest betting favorite, and deliver a pure KO victory so rare in Women’s divisions. Rousey fever was peaking. And so despite what many believed was a more capable opponent than her most recent one, Rousey’s betting line was extreme right out of the gates against Holly Holm. Poor Holly Holm, apparently lacking any respect from the betting public began as a nearly 10-to-1underdog, and things only got worse as fight date grew near. And then a funny thing happened: weigh-ins. Though betting lines always tighten up close to fight date, with reduced juice and higher limits, rarely do they move as much as they did for Holly Holm. Peaking at +1250 just two days before the fight, steady underdog action drove Holm’s line off a cliff on fight day. 
Betting line tracking graph from BestFightOdds.com
We all know what happened inside the cage. And in the euphoric moments after one of the most devastating championship knockouts that will live on in permanent highlight reel glory, Holm didn’t really question Joe Rogan’s post-fight suggestion that she had pulled off the biggest upset in UFC title fight history. But she didn’t. Not by a long shot. In fact, she’s only fourth on the list of biggest title fight upsets, although that’s only because of the late sharp action that countered the rest of the market. She spent months moving from +950 to +1250, and had the lines closed anywhere along that timeline, she would have shattered the prior record held by TJ Dillashaw. But the post weigh-in betting action saw problems with the Rousey steam, and cracks in the champ’s demeanor.
Some point to the recent comments made by Rousey’s mother: criticism of Rousey’s head coach that essentially insinuated he was in the right place at the right time and was not a good coach. Others surmised the rock-star lifestyle of Rousey would take a toll on her ability to train and maintain her focus and edge. But many, placing close attention on the weigh-ins saw more immediate visual clues. When Rousey took the scale, her physique was not as intimidating as in prior fights. And immediately off the scale Rousey exhibited overly aggressive behavior in the face of a calm and collected (and ripped) opponent, capped off with an emotional display of complaining rarely seen from a champ on the interview stage. Whatever the reason, whatever the signal, sharps placed their bets in large plays. They ended up costing Holm a place in the record books in return for monstrous payouts from the books. Such is the nature of market inefficiency; once spotted, it gets soaked up. What about similar episodes? First, TJ Dillashaw’s unexpected destruction of Renan Barao was not a similar story. In fact, it was not only the biggest upset in UFC history, it was also a surprise to the majority of the market who had been supporting Barao right up to fight night. 
Dillashaw was given a reasonable chance for the upset initially by the oddsmakers, but the public pushed him to his now record-breaking heights. And yet when the rematch between the two was announced, the market seemed to have learned its lesson, reversed its opinion, and generally agreed with Dillashaw as a mild favorite the second time around. Dillashaw had slain the “monster” Barao once, and just like that, fan opinion had forever changed. “The mob is fickle, brother.” Other underdog upsets did not see the same reactions. Frankie Edgar for example, remained a sizable betting underdog even after pulling off the unexpected upset of BJ Penn. Edgar’s extreme line that steamed all the way to +620 in the first fight, was replaced by a more tentative closing line of +248 after steady and respectful downward movement leading up to the rematch. 
Similarly, although to a lesser extent, Chris Weidman went from a reasonable +210 underdog against Anderson Silva in their first matchup, to a milder +165 in their rematch, despite winning their first fight by KO. How people perceive fighters has a big impact on who they will throw their money behind in support. And yet even with the benefit of the knowledge of how the fighter actually performed against a certain opponent, plenty of folks still get it wrong. MMA is volatile, yes, fans are called “fans” due to underlying fanatical support that they lend to their favorites. There is however one case where the rematch was correctly pegged by the market: Matt Serra vs George St-Pierre 2. The initial fight ended improbably with a surprise Serra KO upset, at the time the biggest in UFC title fight history. He closed at +550 in that fight, which was awarded to him after winning the UFC veteran’s season of the Ultimate Fighter (bring that back!). 
But unlike the other examples cited above, the second fight resulted in a merciless GSP drubbing of Serra, and even the rare (and last) GSP finish by active strikes. And that’s what the market expected, giving Serra even less of a chance to win than the opening line, and only slightly less of a chance than in their first fight that he won. So, now that we’ve considered a few examples of massive title fight upsets, how do you feel seeing Ronda Rousey already listed as a favorite over Holm in a rematch? Is it Frankie Edgar crazy? Or is it Matt Serra spot on? 
Historical betting lines via BestFightOdds.com, with Several Bookmakers lines selected for consistency. Raw data is provided by Fight Metric. For more statistical analysis of MMA, get the book “Fightnomics: the Hidden Numbers and Science in Mixed Martial Arts.”