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Are The Odds Odd? Positive Return Evidence In German Horse Race Betting

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  • Philipp Heinrich Hoff

Abstract

The article deals with the question, if odds derived from the behavior of bettors in a pari-mutuel setting really reflect the chances of winning for a particular horse in a particular race. Using a unique data set with more than 46,000 race observations from Germany for the years 2001 to 2003 the paper presents evidence on the favorite long-shot bias, evaluates the predictive power of totalizator odds, uses a binary logistic regression model to predict probabilities of winning and finally suggests three wagering strategies that actually yield positive returns in a hold-out oriented analytical setting.

Suggested Citation

  • Philipp Heinrich Hoff, 2013. "Are The Odds Odd? Positive Return Evidence In German Horse Race Betting," Journal of Gambling Business and Economics, University of Buckingham Press, vol. 7(2), pages 19-32.
    • Handle: RePEc:buc:jgbeco:v:7:y:2013:i:2:p:19-32
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    File URL: http://www.ubplj.org/index.php/jgbe/article/view/585
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    More about this item

    Keywords

    asymmetric information; binary logistic regression;

    JEL classification:

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

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