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Betting Exchanges: The Future of Sports Betting?

Author

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  • Ruud H. Koning

    () (University of Groningen)

  • Bart van Velzen

    () (University of Groningen)

Abstract

Sports betting and sports have always been strongly connected. Traditionally, these betting markets have been cleared by bookmakers, who accept bets on certain events. These bookmakers carry the risk of paying the amount wagered if the event occurs. Recently, a new type of betting market has appeared, so-called betting exchanges. In these markets, punters bet with each other directly, and the organization that creates market does not carry any risk that depends on the occurrence of the event. In this paper we provide an analysis of this new type of markets, using a SWOT-analysis. Issues like competitiveness and survival of betting exchanges are addressed. We argue that liquidity is the prime determinant of long-term success of betting exchanges.

Suggested Citation

  • Ruud H. Koning & Bart van Velzen, 2009. "Betting Exchanges: The Future of Sports Betting?," International Journal of Sport Finance, Fitness Information Technology, vol. 4(1), pages 42-62, February.
  • Handle: RePEc:jsf:intjsf:v:4:y:2009:i:1:p:42-62
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    References listed on IDEAS

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    1. Carlino, Gerald & Coulson, N. Edward, 2004. "Compensating differentials and the social benefits of the NFL," Journal of Urban Economics, Elsevier, pages 25-50.
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    Cited by:

    1. Mao, Luke Lunhua & Zhang, James J. & Connaughton, Daniel P., 2015. "Sports gambling as consumption: Evidence from demand for sports lottery," Sport Management Review, Elsevier, vol. 18(3), pages 436-447.
    2. Flepp, Raphael & Nüesch, Stephan & Franck, Egon, 2017. "The liquidity advantage of the quote-driven market: Evidence from the betting industry," The Quarterly Review of Economics and Finance, Elsevier, pages 306-317.
    3. Dominic Cortis & Steve Hales & Frank Bezzina, 2013. "Profiting On Inefficiencies In Betting Derivative Markets: The Case Of Uefa Euro 2012," Journal of Gambling Business and Economics, University of Buckingham Press, vol. 7(1), pages 39-51.

    More about this item

    Keywords

    betting exchange; SWOT; sporst betting; market development;

    JEL classification:

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

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