Internet Sports Books Operating in an Inefficient Marketplace

George Diemer

Journal of Gambling Business and Economics, 2009, vol. 3, issue 1, pages 1-22

Abstract: This research challenges widely accepted theories regarding sports gambling and the bookmaking industry. Specifically, the assertions by Strumpf (2003) and Levitt (2004) that risk-seeking bookmakers maximize profit rather than minimize exposure is tested. To do so, this research focuses on an area that few scholars have explored: internet sports books. A unique data set to analyze the dynamics of competition in NFL gambling industry is used along with a different estimation technique than other scholars have used: cluster analysis. The results of cluster analysis offer insight into the data structure. An alternate hypothesis regarding the workings of the industry are tested to better understand this data structure.

JEL-codes: L83 (search for similar items in EconPapers)
Date: 2009

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