Skip to main content
SpringerLink
Log in

The state of research on markets for sports betting and suggested future directions

  • Sports Symposium
  • Published:
Journal of Economics and Finance Aims and scope Submit manuscript

Abstract

Studies of markets for sports betting can be a rich source of knowledge on the process of price formation and the information content of market prices. But recent research in this field examines questions of a technical nature, questions of interest mostly to active participants in the literature. A change in direction, motivated by creative use of the efficiency hypothesis, may deliver insights that would be valuable to the profession in general. Some preliminary analyses along these lines are presented in the hope of stimulating new lines of inquiry in the field.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Asch, Peter, Burton G. Malkiel, and Richard E. Quandt. 1982. “Racetrack Betting and Informed Behavior.”Journal of Financial Economics 10:187–194.

    Article  Google Scholar 

  • Berg, Joyce, Forrest Nelson, and Thomas Rietz. 2001. “Accuracy and Forecast Standard Error of Prediction Markets.” Technical Report, University of Iowa, College of Business Administration.

  • Brailsford, Timothy J., Stephen A. Easton, Philip K. Gray, and Stephen F. Gray. 1995 “The Efficiency of Australian Football Betting Markets.”Australian Journal of Management 20:167–195.

    Article  Google Scholar 

  • Brown, William O., and Raymond D. Sauer. 1993. “Fundamentals or Noise? Evidence from the Point Spread Betting Market.”Journal of Finance 48:1193–1209.

    Article  Google Scholar 

  • Camerer, Colin F. 1989. “Does the Basketball Market Believe in the Hot Hand?”American Economic Review 79:1257–1261.

    Google Scholar 

  • Crafts, N.F.R. 1985. “Some Evidence of Insider Knowledge in Horse Race Betting in Britain.”Economica 52:295–304.

    Article  Google Scholar 

  • Figlewski, Stephen. 1979. “Subjective Information and Market Efficiency in a Betting Market.”Journal of Political Economy 87:75–88.

    Article  Google Scholar 

  • Gandar, John, W. Dare, Craig Brown, and R. Zuber. 1998. “Informed Traders in the Betting Market for Professional Basketball Games.”Journal of Finance 53:385–401.

    Article  Google Scholar 

  • Hakes, Jahn K., and Raymond D. Sauer. 2004. “A Probability-Based Measure of Productivity in Major League Baseball with Application to the Questions of Clutch Performance and the Value of Pitching.” Manuscript, http://hubcap.clemson.edu/∼sauerr/papers.html.

  • Hakes, Jahn K., Raymond D. Sauer and Kerry Waller. “The Progress of the Betting in a Baseball Game.” Paper presented at the 2005 Meeting of the Western Economic Association, http://hubcap.clemson.edu/∼sauerr/papers.html.

  • Hanson, Robin. 2005. “Foul Play in information Markets.” InInformation Markets: A New Way of Making Decisions in the Public and Private Sectors, edited by Bob Hahn and Paul Tetlock. AEI-Brookings Press.

  • James, Bill, and Jim Henzler. 2002.Win Shares. Stats Inc. Publishing.

  • Maloney, Michael T., and J. Harold Mulherin. 2003. “The Complexity of Price Discovery in an Efficient Market: The Stock Market Reaction to the Challenger Crash.”Journal of Corporate Finance 9:453–479.

    Article  Google Scholar 

  • Paul, Rodney, Andrew Weinbach, and Chris Weinbach. 2003. “Fair Bets and Profitability in College Football Gambling.”Journal of Economics and Finance 27:235–242.

    Google Scholar 

  • Pennock, David M., C. Lee Giles, and Finn A. Nielsen. 2001. “The Real Power of Artificial Markets.”Science 291:987–988.

    Article  Google Scholar 

  • Roll, Richard. 1984. “Orange Juice and Weather.”American Economic Review 74:861–880.

    Google Scholar 

  • Sauer, Raymond. 1998. “The Economics of Wagering Markets.”Journal of Economic Literature 36:2021–2064.

    Google Scholar 

  • Spencer, Jakab. 2004. “New ICAP-Nymex Derivatives Have U.S. Gas Markets Number.”Wall Street Journal (August 4).

  • Strumpf, Koleman. 2003. “Illegal Sports Bookmakers.” Working paper, http://unc.edu/∼cigar.

  • Weinbach, Andrew. 2005. “Gambling and the Poor.” Ph.D. Dissertation, John E. Walker Department of Economics, Clemson University.

  • Wolfers, Justin, and Eric Zitzewitz. 2004. “Prediction Markets.”Journal of Economic Perspectives 18:107–126.

    Article  Google Scholar 

  • Woodland, Linda M., and Bill M. Woodland. 2003. “The Reverse Favourite-Longshot Bias and Market Efficiency: An Update.”Bulletin of Economic Research 55:113–123.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Economics, Clemson University, 222 Sirrine Hall, 29634, Clemson, SC

    Raymond D. Sauer

Authors
  1. Raymond D. Sauer
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Raymond D. Sauer.

Additional information

The author thanks Jahn Hakes and Chad Turner for their help in estimating models on which much of this analysis depends and John Gandar and Rick Zuber for kindly supplying some of the data used in this paper.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Sauer, R.D. The state of research on markets for sports betting and suggested future directions. J Econ Finan 29, 416–426 (2005). https://doi.org/10.1007/BF02761586

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1007/BF02761586

Keywords

Search

Navigation