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Inter- market Arbitrage in Sports Betting

Egon Franck, Erwin Verbeek () and Stephan Nuesch
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Erwin Verbeek: University of Zurich

No 48, NCER Working Paper Series from National Centre for Econometric Research

Abstract: Unlike the existing literature on sports betting, which concentrates on arbitrage within a single market, this paper examines inter-market arbitrage by searching for arbitrage opportunities through combining bets at the bookmaker and the exchange market. Using the posted odds of eight different bookmakers and the corresponding odds traded at a well-known bet exchange for 5,478 football matches played in the top-five European leagues during three seasons, we find (only) ten intra-market arbitrage opportunities. However, we find 1,450 cases in which a combined bet at the bookmaker as well as at the exchange yields a guaranteed positive return. Further analyses reveal that inter-market arbitrage emerges from different levels of informational efficiency between the two markets.

Keywords: sports betting; inter-market arbitrage (search for similar items in EconPapers)
Pages: 29 pages
Date: 2009-10-27
New Economics Papers: this item is included in nep-spo
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