Are betting markets efficient? Evidence from European Football Championships
Open accessAbstract
This article investigates the degree of efficiency of the European Football online betting market by using odds quoted by 12 bookmakers on 21 European championships over 11 years. We show that systematically picking out odds inferior to a threshold delivers a rate of return of 4.45% if best odds are selected across bookmakers and 2.78% if mean odds are used. This amounts to backing overwhelmingly favourites whose probability of winning exceeds 90%. Our results only exploit information contained in odds, are robust to the use of real-time data and different sample periods and hold under risk neutrality and expected utility preferences for realistic degrees of risk aversion. Transaction costs reduce profitability but only for small stake bets.
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- Authors
- Direr, A.
- Affiliations
- Université d'Orléans (FR)
- Corresponding author
- Direr, Alexis
- ORCID
- Direr, Alexis
- Venue
- Applied Economics
- Publisher
- Informa UK Limited
- Published
- 2011-09-23
- Volume
- 45
- Issue
- 3
- Pages
- 343-356
- ISSN
- 0003-6846 (ISSN-L)
- 1466-4283
- OpenAlex
- W2115793685
- Cited by
- 25
- References
- 28
- Citations by year
- 2026: 1 · 2025: 2 · 2024: 2 · 2023: 4 · 2022: 1 · 2021: 3 · 2020: 1 · 2019: 2 · 2018: 1 · 2017: 2 · 2015: 3 · 2013: 1 · 2012: 2
- FWCI
- 2.44
- Type
- journal article
- Language
- en
- Open access
- green
- hal.science
- Licence
- other-oa
- Locations
- Applied Economics (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- HAL (submittedVersion, other-oa)
- Trinity's Access to Research Output (TARA) (Trinity College Dublin) (submittedVersion)
- Zenodo (CERN European Organization for Nuclear Research) (submittedVersion, cc-by)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Sports Analytics and Performance
- Social Sciences › Economics, Econometrics and Finance › Finance › Financial Markets and Investment Strategies
- Social Sciences › Decision Sciences › General Decision Sciences › Decision-Making and Behavioral Economics
- Keywords
- betting markets, market efficiency, betting odds, European football championship, sports betting, arbitrage, rate of return, risk aversion, transaction costs, online betting
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