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Inter- market Arbitrage in Sports Betting

Author

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  • Egon Franck

    (University of Zurich)

  • Erwin Verbeek

    (University of Zurich)

  • Stephan Nuesch

    (University of Zurich)

Abstract

Unlike the existing literature on sports betting, which concentrates on arbitrage within a single market, this paper examines inter-market arbitrage by searching for arbitrage opportunities through combining bets at the bookmaker and the exchange market. Using the posted odds of eight different bookmakers and the corresponding odds traded at a well-known bet exchange for 5,478 football matches played in the top-five European leagues during three seasons, we find (only) ten intra-market arbitrage opportunities. However, we find 1,450 cases in which a combined bet at the bookmaker as well as at the exchange yields a guaranteed positive return. Further analyses reveal that inter-market arbitrage emerges from different levels of informational efficiency between the two markets.

Suggested Citation

  • Egon Franck & Erwin Verbeek & Stephan Nuesch, 2009. "Inter- market Arbitrage in Sports Betting," NCER Working Paper Series 48, National Centre for Econometric Research.
    • Handle: RePEc:qut:auncer:2009_61
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    File URL: http://www.ncer.edu.au/papers/documents/WPNo48.pdf
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    References listed on IDEAS

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    Cited by:

    1. Colantonio Emiliano, 2013. "Betting Markets: Opportunities For Many?," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 200-208, December.

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    Keywords

    sports betting; inter-market arbitrage;

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