Are sports bettors biased toward longshots, favorites, or both? : a literature review

A large body of literature on the favorite-longshot bias finds that sports bettors in a variety of markets appear to have irrational biases toward either longshots (which offer a small chance of winning a large amount of money) or favorites (which offer a high chance of winning a small amount of money). While early studies in horse racing led to an impression that longshot bias is dominant, favorite bias has also now been found in a variety of sports betting markets. This review proposes that the evidence is consistent with both biases being present in the average sports bettor. Sports betting markets with only two potential outcomes, where the favorite therefore has a probability >0.5 of happening, often produce favorite bias. Sports betting markets with multiple outcomes, where the favorite's probability is usually <0.5, appear more consistent with longshot bias. The presence of restricted odds ranges within any given betting market provides an explanation for why single studies support, at most, one bias. This literature review highlights how individual sports bettors might possess biases toward both highly likely, and highly unlikely, events, a contradictory view that has not been summarized in detail before.