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Efficiency of online football betting markets

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  • Angelini, Giovanni
  • De Angelis, Luca

Abstract

This paper evaluates the efficiency of online betting markets for European (association) football leagues. The existing literature shows mixed empirical evidence regarding the degree to which betting markets are efficient. We propose a forecast-based approach for formally testing the efficiency of online betting markets. By considering the odds proposed by 41 bookmakers on 11 European major leagues over the last 11 years, we find evidence of differing degrees of efficiency among markets. We show that, if the best odds are selected across bookmakers, eight markets are efficient while three show inefficiencies that imply profit opportunities for bettors. In particular, our approach allows the estimation of the odds thresholds that could be used to set profitable betting strategies both ex post and ex ante.

Suggested Citation

  • Angelini, Giovanni & De Angelis, Luca, 2019. "Efficiency of online football betting markets," International Journal of Forecasting, Elsevier, vol. 35(2), pages 712-721.
    • Handle: RePEc:eee:intfor:v:35:y:2019:i:2:p:712-721
    DOI: 10.1016/j.ijforecast.2018.07.008
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    References listed on IDEAS

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    Cited by:

    1. Oliver Merz & Raphael Flepp & Egon Franck, 2019. " Sonic Thunder vs Brian the Snail : Fast-sounding racehorse names and prediction accuracy in betting exchange markets," Working Papers 384, University of Zurich, Department of Business Administration (IBW).
    2. Dmitry Dagaev & Egor Stoyan, 2019. "Parimutuel Betting On The Esports Duels: Reverse Favourite-Longshot Bias And Its Determinants," HSE Working papers WP BRP 216/EC/2019, National Research University Higher School of Economics.
    3. Giovanni Angelini & Luca De Angelis & Carl Singleton, 2019. "Informational efficiency and price reaction within in-play prediction markets," Economics & Management Discussion Papers em-dp2019-20, Henley Business School, Reading University.
    4. Guy Elaad & J. James Reade & Carl Singleton, 2019. "Information, prices and efficiency in an online betting market," Economics & Management Discussion Papers em-dp2019-10, Henley Business School, Reading University.

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