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Predicting bookmaker odds and efficiency for UK football

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  • I. Graham
  • H. Stott

Abstract

The efficiency of gambling markets has frequently been questioned. In order to investigate the rationality of bookmaker odds, we use an ordered probit model to generate predictions for English football matches and compare these predictions with the odds of UK bookmaker William Hill. Further, we develop a model that predicts bookmaker odds. Combining a predictive model based on results and a bookmaker model based on previous quoted odds allows us to compare directly William Hill opinion of various teams with the team ratings generated by the predictive model. We also compare the objective value of individual home advantage and distance travelled with the value attributed to these factors by bookmakers. We show that there are systematic biases in bookmaker odds, and that these biases cannot be explained by William Hill odds omitting valuable, or excluding extraneous, information.

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  • I. Graham & H. Stott, 2008. "Predicting bookmaker odds and efficiency for UK football," Applied Economics, Taylor & Francis Journals, vol. 40(1), pages 99-109.
    • Handle: RePEc:taf:applec:v:40:y:2008:i:1:p:99-109
    DOI: 10.1080/00036840701728799
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      • Herman O. Stekler & David Sendor & Richard Verlander, 2009. "Issues in Sports Forecasting," Working Papers 2009-002, The George Washington University, Department of Economics, H. O. Stekler Research Program on Forecasting.
    2. Martin Spann & Bernd Skiera, 2009. "Sports forecasting: a comparison of the forecast accuracy of prediction markets, betting odds and tipsters," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 28(1), pages 55-72.
    3. Constantinou Anthony Costa & Fenton Norman Elliott, 2012. "Solving the Problem of Inadequate Scoring Rules for Assessing Probabilistic Football Forecast Models," Journal of Quantitative Analysis in Sports, De Gruyter, vol. 8(1), pages 1-14, March.
    4. Jaiho Chung & Joon Ho Hwang, 2010. "An Empirical Examination of the Parimutuel Sports Lottery Market versus the Bookmaker Market," Southern Economic Journal, John Wiley & Sons, vol. 76(4), pages 884-905, April.
    5. Nilsson, Håkan & Andersson, Patric, 2010. "Making the seemingly impossible appear possible: Effects of conjunction fallacies in evaluations of bets on football games," Journal of Economic Psychology, Elsevier, vol. 31(2), pages 172-180, April.
    6. 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.
    7. Adrian R. Bell & Chris Brooks & David Matthews & Charles Sutcliffe, 2012. "Over the moon or sick as a parrot? The effects of football results on a club's share price," Applied Economics, Taylor & Francis Journals, vol. 44(26), pages 3435-3452, September.
    8. 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.
    9. 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.
    10. McHale, Ian & Morton, Alex, 2011. "A Bradley-Terry type model for forecasting tennis match results," International Journal of Forecasting, Elsevier, vol. 27(2), pages 619-630.
    11. 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.
    12. 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.
    13. 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.
    14. McHale, Ian & Morton, Alex, 2011. "A Bradley-Terry type model for forecasting tennis match results," International Journal of Forecasting, Elsevier, vol. 27(2), pages 619-630, April.
    15. Jinook Jeong & Jee Young Kim & Yoon Jae Ro, 2019. "On the efficiency of racetrack betting market: a new test for the favourite-longshot bias," Applied Economics, Taylor & Francis Journals, vol. 51(54), pages 5817-5828, November.
    16. June Buchanan & Yun Shen, 2021. "Gambling and marketing: a systematic literature review using HistCite," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(2), pages 2837-2851, June.
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