Does Sportsbook.com Set Pointspreads to Maximize Profits? Tests of the Levitt Model of Sportsbook Behavior
AbstractThe Levitt (2004) model of sportsbook behavior is tested using actual percentages of dollars bet on NFL games from the internet sportsbook, Sportsbook.com. Simple regression results suggest that Sportsbook.com sets pointspreads (prices) to maximize profits, as the Levitt model assumes, not to balance the betting dollars, as the traditional model of sportsbook behavior assumes. Sportsbook.com is found to accept significantly more wagering dollars on road favorites, larger favorites, and on the over for the highest totals in the over/under betting market. Bettor liquidity constraints and sportsbook betting limits may help explain this result.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by University of Buckingham Press in its journal Journal of Prediction Markets.
Volume (Year): 1 (2007)
Issue (Month): 3 (December)
Contact details of provider:
Web page: http://www.ubpl.co.uk/
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Rodney J. Paul & Andrew P. Weinbach & Kristin K. Paul, 2010. "Using Actual Betting Percentages to Analyze Sportsbook Behavior: The Canadian and Arena Football Leagues," New York Economic Review, New York State Economics Association (NYSEA), vol. 41(1), pages 35-44.
- Humphreys, Brad & Paul, Rodney & Weinbach, Andrew, 2010. "Consumption Benefits and Gambling: Evidence From the NCAA Basketball Betting Market," Working Papers 2010-7, University of Alberta, Department of Economics.
- Humphreys, Brad, 2010. "Prices, Point Spreads and Profits: Evidence from the National Football League," Working Papers 2010-5, University of Alberta, Department of Economics.
- Humphreys, Brad & Paul, Rodney & Weinbach, Andrew, 2011. "CEO Turnover: More Evidence on the Role of Performance Expectations," Working Papers 2011-14, University of Alberta, Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Victor Matheson, College of the Holy Cross).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.