BALANCING THE BOOK: IS IT NECESSARY AND SUFFICIENT?

Dudley Stark and Dominic Cortis

Journal of Gambling Business and Economics, 2017, vol. 11, issue 1, 1-6

Abstract: The solvency of bookmakers has only recently been placed in the spotlight even if it is a multibillion dollar sector. It is industry knowledge that bookmakers attempt to 'balance the book' by adjusting odds in relation to wagers made. This paper proves that the only way that profits are known with certainty is if and only if wagers are in proportion to probabilities implied by odds.

Keywords: betting; solvency; odds; balancing the book; ruin (search for similar items in EconPapers)
JEL-codes: L83 (search for similar items in EconPapers)
Date: 2017
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