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Profiting From Arbitrage And Odds Biases Of The European Football Gambling Market

Author

Listed:
  • Anthony Costa Constantinou
  • Norman Elliott Fenton

Abstract

A gambling market is usually described as being inefficient if there are one or more betting strategies that generate profit, at a consistent rate, as a consequence of exploiting market flaws. This paper examines the online European football gambling market based on 14 European football leagues over a period of seven years, from season 2005/06 to 2011/12 inclusive, and takes into consideration the odds provided by numerous bookmaking firms. Contrary to common misconceptions, we demonstrate that the accuracy of bookmakers' odds has not improved over this period. More importantly, our results question market efficiency by demonstrating high profitability on the basis of consistent odds biases and numerous arbitrage opportunities.

Suggested Citation

  • Anthony Costa Constantinou & Norman Elliott Fenton, 2013. "Profiting From Arbitrage And Odds Biases Of The European Football Gambling Market," Journal of Gambling Business and Economics, University of Buckingham Press, vol. 7(2), pages 41-70.
    • Handle: RePEc:buc:jgbeco:v:7:y:2013:i:2:p:41-70
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    File URL: http://www.ubplj.org/index.php/jgbe/article/view/630
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    Citations

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    Cited by:

    1. Babatunde Buraimo & David Peel & Rob Simmons, 2013. "Systematic Positive Expected Returns in the UK Fixed Odds Betting Market: An Analysis of the Fink Tank Predictions," IJFS, MDPI, vol. 1(4), pages 1-15, December.
    2. David Winkelmann & Marius Ötting & Christian Deutscher & Tomasz Makarewicz, 2024. "Are Betting Markets Inefficient? Evidence From Simulations and Real Data," Journal of Sports Economics, , vol. 25(1), pages 54-97, January.
    3. Sathya Ramesh & Ragib Mostofa & Marco Bornstein & John Dobelman, 2019. "Beating the House: Identifying Inefficiencies in Sports Betting Markets," Papers 1910.08858, arXiv.org, revised Oct 2019.
    4. Philip W. S. Newall & Dominic Cortis, 2021. "Are Sports Bettors Biased toward Longshots, Favorites, or Both? A Literature Review," Risks, MDPI, vol. 9(1), pages 1-9, January.
    5. Chia-Hao Chang, 2021. "Construction of a Predictive Model for MLB Matches," Forecasting, MDPI, vol. 3(1), pages 1-11, February.
    6. Philip W. S. Newall, 2015. "How bookies make your money," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 10(3), pages 225-231, May.
    7. repec:cup:judgdm:v:10:y:2015:i:3:p:225-231 is not listed on IDEAS
    8. Bernardo, Giovanni & Ruberti, Massimo & Verona, Roberto, 2015. "Testing semi-strong efficiency in a fixed odds betting market: Evidence from principal European football leagues," MPRA Paper 66414, University Library of Munich, Germany.
    9. David Winkelmann & Christian Deutscher & Marius Ötting, 2021. "Bookmakers’ mispricing of the disappeared home advantage in the German Bundesliga after the COVID-19 break," Applied Economics, Taylor & Francis Journals, vol. 53(26), pages 3054-3064, June.
    10. Bernardo, Giovanni & Ruberti, Massimo & Verona, Roberto, 2019. "Semi-strong inefficiency in the fixed odds betting market: Underestimating the positive impact of head coach replacement in the main European soccer leagues," The Quarterly Review of Economics and Finance, Elsevier, vol. 71(C), pages 239-246.
    11. Buhagiar, Ranier & Cortis, Dominic & Newall, Philip W.S., 2018. "Why do some soccer bettors lose more money than others?," Journal of Behavioral and Experimental Finance, Elsevier, vol. 18(C), pages 85-93.

    More about this item

    Keywords

    betting market; favourite-longshot bias; football betting; profit margin; soccer betting; sports betting; sports gambling;
    All these keywords.

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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