New entry, strategic diversity and efficiency in soccer betting markets: the creation and suppression of arbitrage opportunities

Grant, A., Oikonomidis, A., Bruce, A.C. ORCID: 0000-0001-5748-0701 and Johnson, J.E.V., 2018. New entry, strategic diversity and efficiency in soccer betting markets: the creation and suppression of arbitrage opportunities. The European Journal of Finance, 24 (18), pp. 1799-1816. ISSN 1351-847X

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Abstract

We find that prices offered by competing bookmakers within the same quote-driven soccer (football) betting market provide arbitrage opportunities. However, the management practices of bookmakers prevent informed bettors exploiting these in practice. We identify two groups of bookmakers, 'position-takers' and 'book-balancers.' Position-takers alter their odds infrequently, while actively restricting informed traders. Book-balancers actively manage inventory by adjusting odds, and place few restrictions on their customers. We identify 545 arbitrage portfolios, and find that around 50% would require a bet on the favourite at the position-taking bookmaker. The management practices of position-takers generally prevent these opportunities being exploited in practice.

Item Type: Journal article
Publication Title: The European Journal of Finance
Creators: Grant, A., Oikonomidis, A., Bruce, A.C. and Johnson, J.E.V.
Publisher: Taylor & Francis
Date: 2018
Volume: 24
Number: 18
ISSN: 1351-847X
Identifiers:
NumberType
10.1080/1351847x.2018.1443148DOI
Divisions: Schools > Nottingham Business School
Depositing User: Linda Sullivan
Date Added: 29 Nov 2018 16:01
Last Modified: 05 Sep 2019 03:00
URI: http://irep.ntu.ac.uk/id/eprint/35180

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