Efficient Spread Betting Markets: A Literature Review

Jonas Vandenbruaene, Marc De Ceuster and Jan Annaert

Journal of Sports Economics, 2022, vol. 23, issue 7, 907-949

Abstract: Are simple trading strategies profitable? It is a question that has been on the minds of academics and practitioners for decades. In this paper, we review the longstanding literature on trading strategies in spread betting (also known as handicap betting), a popular sports betting microstructure. We review over 600 strategy implementations and find that market efficiency and systematic misperceptions are not mutually exclusive per se. Predictable glitches occur, but they are too small to be profitably exploited which is consistent with efficient markets. Furthermore, while controlling for data mining issues is becoming mainstream in finance, it has not yet made its way into this literature. We provide evidence that the hurdle rate of | z | > 3 which has been put forward in the broader finance literature should also be used in betting market research.

Keywords: Market efficiency; sports betting; spread betting; handicap betting; literature review (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:sae:jospec:v:23:y:2022:i:7:p:907-949

DOI: 10.1177/15270025211071042

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