Returns on complex bets: evidence from Asian Handicap betting on soccer

Purpose - The Asian Handicap is a way to bet on soccer matches where payouts depend on an adjustment to the score that favors the weaker team. These bets can feature the possibility of all or half the bet being refunded and this makes the calculation of their expected return more complex than for traditional betting on a home win, away win or draw. We examine the behavior of odds in this market. Design/methodology/approach - In addition to a using well-known publicly available source of information on Asian Handicap betting odds – which provides the average odds across a range of bookmakers – we have also sourced a large dataset of Asian Handicap odds offered by an individual bookmaker. Findings - We show that bettors systematically lose more money on Asian Handicap bets where refunds are not possible than when it is possible to obtain a half refund. We also show that bets with the possibility of a full refund have the lowest loss rates. We demonstrate that this pattern of differences in loss rates across bets is predictable based on the odds quoted. This pattern could represent preferences, with gamblers disliking bets featuring potential refunds, but we argue the evidence points more towards gamblers incorrectly calculating expected loss rates. Originality/value - Despite being one of the world's largest betting markets, there has been almost no previous research on the properties of the Asian Handicap soccer betting. Our finding of clear differences in returns on simultaneously available bets on the same team is also a new anomaly previously undocumented in any research on sports betting.