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Using Actual Betting Percentages to Analyze Sportsbook Behavior: The Canadian and Arena Football Leagues

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Author Info

  • Rodney J. Paul
  • Andrew P. Weinbach
  • Kristin K. Paul

Abstract

Sportsbook behavior is tested for the Canadian and Arena Football Leagues using real sportsbook betting percentages from on-line sportsbooks. The balanced book hypothesis of the traditional sportsbook models does not appear to hold for these leagues, as favorites and overs attract more than 50 percent of the betting dollars. Although there is some slight evidence toward shading the line in these directions, there is also no overwhelming evidence supporting the Levitt (2004) hypothesis, as sportsbooks do not appear to be actively pricing to maximize profits. In general, the results seem more consistent with the sportsbook pricing as a forecast, content with earning their commission on losing bets as simple strategies win about 50 percent of the time.

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Bibliographic Info

Article provided by New York State Economics Association (NYSEA) in its journal New York Economic Review.

Volume (Year): 41 (2010)
Issue (Month): 1 ()
Pages: 35-44

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Handle: RePEc:nye:nyervw:v:41:y:2010:i:1:p:35-44

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  1. Rodney J. Paul & Andrew P. Weinbach, 2007. "Does Sportsbook.com Set Pointspreads to Maximize Profits? Tests of the Levitt Model of Sportsbook Behavior," Journal of Prediction Markets, University of Buckingham Press, vol. 1(3), pages 209-218, December.
  2. Rodney J. Paul & Andrew P. Weinbach, 2002. "Market Efficiency and a Profitable Betting Rule: Evidence From Totals on Professional Football," Journal of Sports Economics, , vol. 3(3), pages 256-263, August.
  3. Rodney J. Paul & Andrew P. Weinbach, 2008. "Price Setting in the NBA Gambling Market: Tests of the Levitt Model of Sportsbook Behavior," International Journal of Sport Finance, Fitness Information Technology, vol. 3(3), pages 137-145, August.
  4. Zuber, Richard A & Gandar, John M & Bowers, Benny D, 1985. "Beating the Spread: Testing the Efficiency of the Gambling Market for National Football League Games," Journal of Political Economy, University of Chicago Press, vol. 93(4), pages 800-806, August.
  5. Sauer, Raymond D, et al, 1988. "Hold Your Bets: Another Look at the Efficiency of the Gambling Market for National Football League Games: Comment," Journal of Political Economy, University of Chicago Press, vol. 96(1), pages 206-13, February.
  6. Gray, Philip K & Gray, Stephen F, 1997. " Testing Market Efficiency: Evidence from the NFL Sports Betting Market," Journal of Finance, American Finance Association, vol. 52(4), pages 1725-37, September.
  7. Richard Borghesi & Rodney Paul & Andrew Weinbach, 2009. "Market frictions and overpriced favourites: evidence from arena football," Applied Economics Letters, Taylor & Francis Journals, vol. 16(9), pages 903-906.
  8. Lyn D. Pankoff, 1968. "Market Efficiency and Football Betting," The Journal of Business, University of Chicago Press, vol. 41, pages 203.
  9. Golec, Joseph & Tamarkin, Maurry, 1991. "The degree of inefficiency in the football betting market : Statistical tests," Journal of Financial Economics, Elsevier, vol. 30(2), pages 311-323, December.
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