Game over? Assessing the impact of the emergence of a profitable wagering strategy in major league baseball wagering markets

Matt E. Ryan and Jackson Celestin

Applied Economics, 2018, vol. 50, issue 37, 3979-3991

Abstract: Testing the impact of profitable investment strategies is often hampered by the practical difficulties of determining who knew what, and when. This study examines the impact of the publication of a profitable wagering strategy on the Major League Baseball wagering market. While standard measures of market efficiency characterized the Major League Baseball win–loss moneyline market to be efficient, previous works shows that wagering on underdogs early in the season can generate persistent profits. Though the overall efficiency of the baseball wagering market remained after publication, these profitable opportunities dissipated. Bettor behaviour is found to play varying roles across different wagering strategies; up to half of the drop in returns can be attributed to wagering market participant behaviour.

Date: 2018
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DOI: 10.1080/00036846.2018.1430349

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