Unlike the existing literature on sports betting, which concentrates on arbitrage within a single market, this paper examines inter-market arbitrage by searching for arbitrage opportunities through combining bets at the bookmaker and the exchange market. Using the posted odds of eight different bookmakers and the corresponding odds traded at a well-known bet exchange for 5,478 football matches played in the top-five European leagues during three seasons, we find (only) ten intra-market arbitrage opportunities. However, we find 1,450 cases in which a combined bet at the bookmaker as well as at the exchange yields a guaranteed positive return. Further analyses reveal that inter-market arbitrage emerges from different levels of informational efficiency between the two markets.
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Paper provided by National Centre for Econometric Research in its series NCER Working Paper Series with number
48.
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Shleifer, Andrei & Vishny, Robert W, 1997.
" The Limits of Arbitrage,"
Journal of Finance,
American Finance Association, vol. 52(1), pages 35-55, March.
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