Just How Serious is Insider Trading? An Evaluation using Thoroughbred Wagering Markets

Les Coleman

Journal of Gambling Business and Economics, 2007, vol. 1, issue 1, pages 31-55

Abstract: This paper quantifies the extent and changes in insider trading in the Melbourne racetrack betting market using a unique, long term dataset. Wagering markets share many of the characteristics of other financial markets, and are simple, with good data and a designated endpoint. Thus they are an excellent natural laboratory to study what is probably happening in qualitatively similar conventional markets. Results of this paper provide statistically significant support for hypotheses supporting the existence and increase in level of insider trading, and suggest that around two percent of betting is by insiders.

Keywords: INSIDER TRADING; STRONG MARKET EFFICIENCY; WAGERING MARKETS (search for similar items in EconPapers)
JEL-codes: L83 (search for similar items in EconPapers)
Date: 2007

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