Why are Gambling Markets Organised so Differently from Financial Markets?

The seminal findings of Kuypers [13] and Levitt [23] imply that sportsbooks may sometimes deliberately propose values that deviate from their estimated median to entice a preponderance of bets on the side that maximizes excess error.

“The seminal findings of Kuypers [13] and Levitt [23], however, imply that sportsbooks may sometimes deliberately propose values that deviate from their estimated median to entice a preponderance of bets on the side that maximizes excess error.”

The stratifications showing the trend of point spread overestimating median margin of victory were home favorites, agreeing with the idea that sportsbooks are exploiting the public's bias for wagering on the favorite.

“Indeed, the stratifications showing this trend were home favorites, agreeing with the idea that the sportsbooks are exploiting the public’s bias for wagering on the favorite [23].”

The bias away from even-money bets is consistent with Levitt's hypothesis that odds makers shade the odds, shifting even games to slight favorite/underdog games.

“This bias away from even-money bets is consistent with Levitt's hypothesis that odds makers shade the odds, shifting even games to slight favorite/underdog games.”