Financial Markets and Portfolio Management

, Volume 22, Issue 2, pp 169–192 | Cite as

Sports betting as a new asset class—current market organization and options for development

Article

Abstract

New asset classes are originally distributed via over the counter channels; mostly negotiated, traded, and settled on a bilateral and ad-hoc basis. Subsequently, the demand for organized market services grows alongside trading volumes, number of market participants, and distribution reach. This paper focuses on sports betting as a new asset class and uses the analogies between the development of traditional and new asset classes as a framework to extend market organization. The first section motivates sports betting as a new asset class based on its economic relevance. In Sect. 2, the European market is described by product design, distribution platforms, and regulatory environment. In Sect. 3, we discuss the dimensions of market model, technology, and regulation as prerequisites to develop organized markets. Against this background, we compare the value chain in financial and sports betting markets to identify and describe three options for development: a regulated market environment, an inter-bookmaker platform, and central counterparty clearing services.

Keywords

Sports betting Regulated market CCP clearing Inter-bookmaker platform Market microstructure 

JEL Classification

G10 D40 D51 

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Copyright information

© Swiss Society for Financial Market Research 2008

Authors and Affiliations

  1. 1.Chair of Business Administration, E-Finance LabJohann Wolfgang Goethe-UniversityFrankfurt am MainGermany

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