Tote arbitrage and lock opportunities in racetrack betting

David Edelman and Nigel O'Brian

The European Journal of Finance, 2004, vol. 10, issue 5, 370-378

Abstract: A game-theoretic approach to the investigation of arbitrage opportunities based on combinations of exotic wagers for the same event is described. This situation is also known as a 'lock' or 'Dutch Book'. The technique is applied to recent totalizator data from Australian thoroughbred races. It appears that such opportunities appear fairly regularly, at least according to published final dividends for various bet types. The method is demonstrated in some detail on a particular example.

Keywords: dutch book; lock; arbitrage; zero-sum game; minimax; totalisator; pari-mutuel; gambling; bet; wager; racetrack (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (8)

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DOI: 10.1080/1351847042000199042

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