Betting Markets: Opportunities For Many?
The paper deals with the opportunities to make risk free profits from sports arbitrage betting and bonuses. Different questions arise around the topic: how common are these chances? Can these really be considered as free risk investments? Can cooperation among bettors influence them? Answers involve betting markets, which have received much attention in the recent economic literature due the fact that betting has become a multi-billion dollar industry. Betting markets have experienced an extraordinary growth over the last years due to extensive deregulation, abolition of national monopolies and the advent of internet gambling. Part of published research has focused on agents behaviour (typically bookmakers and bettors) and markets inefficiency. A betting market is expected to be efficient, since it involves public information and numerous participants; it is usually quite large; it is characterized by limited transaction costs; it offers readily observable market expectations and outcomes; its odds and payoffs are fixed and they cannot be influenced by bettors. Despite of these characteristics, sports arbitrage opportunities happen regularly, hundreds of times every day in a betting market. Adjustment processes are usually rapid but not instantaneous. Specific software applications exist which show sport arbitrage situations in real time. Hence creating an income via sports arbitrage betting is possible, even if this can not be considered as a riskless investment. Suitable preparation and knowledge, enough time spent in the activity, adequate financial resources are indeed necessary. Essentially risk free profits can be made by bettors from bonuses (particularly deposit bonuses and risk free bets) offered by bookmakers, by means of the adoption of specific profitable cover strategy. Cooperation among bettors may help in realizing greater advantages both from sports arbitrage betting and from bonuses. Cooperation may allow bettors to share information and knowledge about the sports arbitrage betting. This may enhance the effectiveness and efficiency of this activity by reducing the so called â€œexecution riskâ€. Moreover, if some conditions take place, a bettor could achieve higher profits cooperating with other punters rather than using a bonus alone.
Volume (Year): 1 (2013)
Issue (Month): 2 (December)
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- Vaughan Williams, Leighton, 1999. "Information Efficiency in Betting Markets: A Survey," Bulletin of Economic Research, Wiley Blackwell, vol. 51(1), pages 1-30, January.
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- Douglas M. Walker & John D. Jackson, 2011. "The Effect Of Legalized Gambling On State Government Revenue," Contemporary Economic Policy, Western Economic Association International, vol. 29(1), pages 101-114, 01.
- Marshall, Ben R., 2009. "How quickly is temporary market inefficiency removed?," The Quarterly Review of Economics and Finance, Elsevier, vol. 49(3), pages 917-930, August.
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