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Information and Idiosyncratic Risk in the NCAA Men's Basketball Betting Market


  • Ira Horowitz

    (University of Florida)


Betting lines and scores from the 2009/10 college basketball season for 169 mid-major and major colleges are used to verify the efficiency hypothesis for the betting-market analogy to the CAPM-based market model. As in that model, the portion of the variance in the spreads that is unexplained by the betting lines is the idiosyncratic risk associated with a team’s games. The paper shows that this risk is due to team-specific and conference-specific informational and consistency-of-play factors that impact bettors’ decisions.

Suggested Citation

  • Ira Horowitz, 2011. "Information and Idiosyncratic Risk in the NCAA Men's Basketball Betting Market," Journal of Gambling Business and Economics, University of Buckingham Press, vol. 5(3), pages 27-42, October.
  • Handle: RePEc:buc:jgbeco:v:5:y:2011:i:3:p:27-42

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    information; idiosyncratic risk; NCAA basketball; betting markets; market efficiency; synchronicity; CAPM market model; competitive balance; power ratings; team-specific information; conference-specific information;

    JEL classification:

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


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