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Balancing The Book: Is It Necessary And Sufficient?

Author

Listed:
  • Stark, Dudley
  • Cortis, Dominic

Abstract

The solvency of bookmakers has only recently been placed in the spotlight even if it is a multibillion dollar sector. It is industry knowledge that bookmakers attempt to 'balance the book' by adjusting odds in relation to wagers made. This paper proves that the only way that profits are known with certainty is if and only if wagers are in proportion to probabilities implied by odds.

Suggested Citation

  • Stark, Dudley & Cortis, Dominic, 2017. "Balancing The Book: Is It Necessary And Sufficient?," Journal of Gambling Business and Economics, University of Buckingham Press, vol. 11(1), pages 1-6.
  • Handle: RePEc:buc:jgbeco:v:11:y:2017:i:1:p:1-6
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    File URL: http://ubplj.org/index.php/jgbe/article/view/1280
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    Citations

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    Cited by:

    1. 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.
    2. Gustav Axén & Dominic Cortis, 2020. "Hedging on Betting Markets," Risks, MDPI, vol. 8(3), pages 1-14, August.
    3. 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.
    4. Axén, Gustav & Cortis, Dominic, 2019. "Extending the price constraints of betting markets," Journal of Behavioral and Experimental Finance, Elsevier, vol. 23(C), pages 181-188.

    More about this item

    Keywords

    betting; solvency; odds; balancing the book; ruin;
    All these keywords.

    JEL classification:

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

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