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

Grant, A, Oikonomidis, A, Bruce, AC ORCID: https://orcid.org/0000-0001-5748-0701 and Johnson, JEV, 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

Preview

Text 12737_Bruce..pdf - Post-print Download (1MB) | Preview

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:	Number Type 10.1080/1351847x.2018.1443148 DOI
Divisions:	Schools > Nottingham Business School
Record created by:	Linda Sullivan
Date Added:	29 Nov 2018 16:01
Last Modified:	05 Sep 2019 03:00
URI:	https://irep.ntu.ac.uk/id/eprint/35180

Actions (login required)

Edit View

Statistics

Views

Downloads