ARE THE ODDS ODD? POSITIVE RETURN EVIDENCE IN GERMAN HORSE RACE BETTING

Philipp Hoff

Journal of Gambling Business and Economics, 2013, vol. 7, issue 2, 19-32

Abstract: The article deals with the question, if odds derived from the behavior of bettors in a pari-mutuel setting really reflect the chances of winning for a particular horse in a particular race. Using a unique data set with more than 46,000 race observations from Germany for the years 2001 to 2003 the paper presents evidence on the favorite long-shot bias, evaluates the predictive power of totalizator odds, uses a binary logistic regression model to predict probabilities of winning and finally suggests three wagering strategies that actually yield positive returns in a hold-out oriented analytical setting.

Keywords: asymmetric information; binary logistic regression (search for similar items in EconPapers)
JEL-codes: L83 (search for similar items in EconPapers)
Date: 2013
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