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Lock! Risk-Free Arbitrage in the Japanese Racetrack Betting Market

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  • Masahiro Ashiya

Abstract

This article finds that arbitrage was possible in 2 of the 175 Japanese thoroughbred races even after taking account of (a) the size of the minimum betting unit and (b) the negative effect of arbitrage on the odds. The guaranteed profits in these two races were 5,120 yen (about US$64) and 340 yen.

Suggested Citation

  • Masahiro Ashiya, 2015. "Lock! Risk-Free Arbitrage in the Japanese Racetrack Betting Market," Journal of Sports Economics, , vol. 16(3), pages 322-330, April.
  • Handle: RePEc:sae:jospec:v:16:y:2015:i:3:p:322-330
    DOI: 10.1177/1527002513493630
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    References listed on IDEAS

    as
    1. Egon Franck & Erwin Verbeek & Stephan Nüesch, 2013. "Inter-market Arbitrage in Betting," Economica, London School of Economics and Political Science, vol. 80(318), pages 300-325, April.
    2. Marshall Gramm & C. Nicholas McKinney & Douglas H. Owens, 2012. "Efficiency and arbitrage across parimutuel wagering pools," Applied Economics, Taylor & Francis Journals, vol. 44(14), pages 1813-1822, May.
    3. David Edelman & Nigel O'Brian, 2004. "Tote arbitrage and lock opportunities in racetrack betting," The European Journal of Finance, Taylor & Francis Journals, vol. 10(5), pages 370-378.
    4. Marshall, Ben R., 2009. "How quickly is temporary market inefficiency removed?," The Quarterly Review of Economics and Finance, Elsevier, vol. 49(3), pages 917-930, August.
    5. Shin, Hyun Song, 1993. "Measuring the Incidence of Insider Trading in a Market for State-Contingent Claims," Economic Journal, Royal Economic Society, vol. 103(420), pages 1141-1153, September.
    6. Thaler, Richard H & Ziemba, William T, 1988. "Parimutuel Betting Markets: Racetracks and Lotteries," Journal of Economic Perspectives, American Economic Association, vol. 2(2), pages 161-174, Spring.
    7. Nikolaos Vlastakis & George Dotsis & Raphael N. Markellos, 2009. "How efficient is the European football betting market? Evidence from arbitrage and trading strategies," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 28(5), pages 426-444.
    8. Donald B. Hausch & William T. Ziemba, 1990. "Locks at the Racetrack," Interfaces, INFORMS, vol. 20(3), pages 41-48, June.
    9. repec:bla:econom:v:56:y:1989:i:223:p:323-41 is not listed on IDEAS
    10. Hausch, Donald B & Ziemba, William T, 1990. "Arbitrage Strategies for Cross-Track Betting on Major Horse Races," The Journal of Business, University of Chicago Press, vol. 63(1), pages 61-78, January.
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    Cited by:

    1. Isabel Abinzano & Luis Muga & Rafael Santamaria, 2017. "Behavioral Biases Never Walk Alone," Journal of Sports Economics, , vol. 18(2), pages 99-125, February.

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