If betting markets are efficient, then the expected loss rate on all bets on a game can be calculated from the quoted odds. Guides to sports betting tell bettors how to do this calculation of the predicted average loss rate. We show that if bookmakers set higher profit margins for bets with...

Online sports betting is growing rapidly around the world. We describe how the competitive structure of the bookmaking market affects odds when bettors disagree about the probabilities of the outcomes of sporting events but are on average correct. We show that the demand for bets on longshots is...

We describe how the presence of insiders with superior information about potential outcomes of sporting events affects odds set by bookmakers, using a generalized version of the model in Shin (1991). The model has been widely cited as an explanation for the pattern of favorite-longshot bias...

We examine how people's forecasts for oil or gasoline prices influence their forecasts for broader inflation. We find little evidence from two US household surveys that people over-react to their beliefs about gasoline prices when formulating their forecasts about inflation, with much of the...

The Asian Handicap is a way to bet on soccer matches where payouts depend on an adjustment to the score that favors the weaker team. These bets are more complex than traditional betting on soccer because they require assessing the likely goal difference in the match rather than just the...

Research on sports betting markets has generally found a favorite-longshot bias, the empirical pattern for loss rates for bets on longshots to be higher than for favorites, which implies the odds do not reflect the underlying probabilities. The existing literature focuses largely on pari-mutuel...

The CFTC has recently licensed a commercial prediction market to operate in the US. Previous theoretical work has not incorporated that prediction markets charge fees. We examine the impact of fees by introducing them to a model in which the market price equals the true probability when there...

We compare the properties of betting market odds set in two distinct markets for a large sample of European soccer matches. We confirm inefficiencies in the traditional market for bets on a home win, an away win or a draw as found in previous studies such as Angelini and De Angelis (2019), in...

Sports betting markets can be considered strongly efficient if expected returns on all possible bets on an event are equal. If this form of efficiency holds, then there is a direct mapping from betting odds into probabilities of outcomes of sporting events. We compare two regression-based...

You can bet on an event where there are multiple possible winners but only one will actually win. At the odds offered, you think there may be multiple bets worth taking. How much do you place on each bet to maximize your expected utility? We describe how this problem can be solved for concave...