Authors: Schnytzer, Adi and Shilony, Yuval
Source: The Journal of Gambling Business and Economics, Volume 1, Number 1, February 2007 , pp. 13-29(17)
The purpose of this paper is to determine empirically whether or not there is systematic price rigging in three Australian betting markets: Horse, harness and greyhound racing. We present a simple model which shows the conditions under which it is optimal for insiders to rig prices by deliberate underperformance in some races. We then show how an empirical analysis of the relationship between win and place probabilities in conjunction with observed patterns of betting behavior, may be used to establish the presence of price rigging. It is shown that there is no significant systematic price rigging in these markets.
Authors: Hurley, William; McDonough, Lawrence
Source: The Journal of Gambling Business and Economics, Volume 1, Number 1, February 2007 , pp. 3-12(10)
In the study of wagering markets, it is generally the case that the objective probabilities of various contestants (horses, teams, etc.) winning do not match those implied by the betting. More often than not favourites are underbet and longshots overbet, although some studies have found the reverse. We offer an explanation in the case where there is imperfect competition among book-makers and heterogeneous expectations among bettors.
Authors: Forrest, David; Alagic, Dika
Source: The Journal of Gambling Business and Economics, Volume 1, Number 1, February 2007 , pp. 57-68(12)
Lotto Extra was offered as part of the United Kingdom National Lottery’s portfolio of games between 2000 and 2006. A demand model for the game is estimated and used to illustrate a discussion of why sales of the game fell steadily to the point where it was no longer viable. Emphasis is placed on the lack of minor prizes and the long sequences of weeks when no one won the jackpot (and only) prize.
Authors: Liu, Shuang; Johnson, Johnnie E.V.
Source: The Journal of Gambling Business and Economics, Volume 1, Number 1, February 2007 , pp. 69-84(16)
This paper explores the extent to which decision makers in a naturalistic environment, the Hong Kong horserace betting market, anchor their probability judgments on highly visible information and make insufficient adjustments in the light of additional data. Linear regression and conditional logit models are employed to examine the extent to which certain types of information are over-represented in market odds. The results suggest that, in contrast to much of the research on anchoring conducted in laboratories, the Hong Kong betting public do not anchor their judgements on past performances of horses, jockeys or trainers.
Authors: Sung, M.; Johnson, J.E.V.
Source: The Journal of Prediction Markets, Volume 1, Number 1, February 2007 , pp. 43-59(17)
This paper compares two approaches to predicting outcomes in a speculative market, the horserace betting market. In particular, the nature of one- and two-step conditional logit procedures involving a process for exploding the choice set are outlined, their strengths and weaknesses are compared and their relative effectiveness is evaluated by predicting winning probabilities for horse races at a UK racetrack. The models incorporate variables which are widely recognised as having predictive power and which should therefore be effectively discounted in market odds. Despite this handicap, both approaches produce probability estimates which can be used to earn positive returns, but the two-step approach yields substantially higher profits.
Authors: Deschamps, Bruno; Gergaud, Olivier
Source: The Journal of Prediction Markets, Volume 1, Number 1, February 2007 , pp. 61-73(13)
We analyze the efficiency of English football betting markets between 2002 and 2006. We find evidence of a positive favourite-longshot bias for both home odds and away odds. Draw odds are instead characterized by a negative longshot bias. We also identify a draw bias in the sense that betting at draw odds yields a higher return than betting at home or away odds. Finally, we investigate betting strategies that exploit the variance of odds between bookmakers.