New entry, strategic diversity and efficiency in soccer betting markets: the creation and suppression of arbitrage opportunities
New entry, strategic diversity and efficiency in soccer betting markets: the creation and suppression of arbitrage opportunities
We find that prices offered by competing bookmakers within the same quote-driven soccer (football) betting market provide arbitrage opportunities. However, the management practices of bookmakers prevent informed bettors exploiting these in practice. We identify two groups of bookmakers, ‘position-takers’ and ‘book-balancers.’ Position-takers alter their odds infrequently, while actively restricting informed traders. Book-balancers actively manage inventory by adjusting odds, and place few restrictions on their customers. We identify 545 arbitrage portfolios, and find that around 50% would require a bet on the favourite at the position-taking bookmaker. The management practices of position-takers generally prevent these opportunities being exploited in practice.
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Grant, Andrew
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Oikonomidis, Anastasios
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Bruce, Alistair C.
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Johnson, Johnnie E.V.
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Grant, Andrew
3c10e948-3f7e-452e-a3f1-8cfb8712c522
Oikonomidis, Anastasios
3a9f5674-08ab-4f9f-9285-bb929dce146c
Bruce, Alistair C.
acee9acc-fd28-44bf-8781-7a9d135319ac
Johnson, Johnnie E.V.
6d9f1a51-38a8-4011-a792-bfc82040fac4
Grant, Andrew, Oikonomidis, Anastasios, Bruce, Alistair C. and Johnson, Johnnie E.V.
(2018)
New entry, strategic diversity and efficiency in soccer betting markets: the creation and suppression of arbitrage opportunities.
European Journal of Finance, .
(doi:10.1080/1351847X.2018.1443148).
Abstract
We find that prices offered by competing bookmakers within the same quote-driven soccer (football) betting market provide arbitrage opportunities. However, the management practices of bookmakers prevent informed bettors exploiting these in practice. We identify two groups of bookmakers, ‘position-takers’ and ‘book-balancers.’ Position-takers alter their odds infrequently, while actively restricting informed traders. Book-balancers actively manage inventory by adjusting odds, and place few restrictions on their customers. We identify 545 arbitrage portfolios, and find that around 50% would require a bet on the favourite at the position-taking bookmaker. The management practices of position-takers generally prevent these opportunities being exploited in practice.
Text
Arbmirage_150218
- Accepted Manuscript
More information
Accepted/In Press date: 15 February 2018
e-pub ahead of print date: 5 March 2018
Identifiers
Local EPrints ID: 418258
URI: http://eprints.soton.ac.uk/id/eprint/418258
ISSN: 1351-847X
PURE UUID: e806b2ff-b6ae-4665-bf30-48b69812edd8
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Date deposited: 27 Feb 2018 17:30
Last modified: 16 Mar 2024 06:17
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Contributors
Author:
Andrew Grant
Author:
Anastasios Oikonomidis
Author:
Alistair C. Bruce
Author:
Johnnie E.V. Johnson
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