Optimal betting and efficiency in parimutuel betting markets with information costs

Article Abstract:

The question of why bettors fail to correctly estimate the outcomes of horse and dog races was examined in a model in which outcomes are dependent on the takeout of the races. It was postulated that bettors fall into two groups, those who devote time and effort in determining the probabilities of outcomes of races and those who do not. It was argued that information costs which are included in takeouts result in expected returns and market odds which vary significantly from the perfect information betting market. It was concluded that bettors in races use information which differ significantly from the probable outcomes of races.

Misc. Amusement, Recreation Services, Legal Gambling, Gambling Industries, Economic aspects, Gamblers, Probabilities, Probability theory

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Inside information in a betting market

Article Abstract:

The importance of inside information in a betting situation is analyzed. Although accurate assessment of such information is not easy to undertake because of the shady nature of the transaction, its results in terms of increased profits and power to the beneficiary of such information are easy to observe. Even deficient or secondary information proves to be a deciding factor in the acquisition of financial and political gain. As a case study, the horse betting market in Australia is presented.

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Why is there a favourite-longshot bias in British racetrack betting markets?

Article Abstract:

There are major variations governing horse race favorite under-betting and longshots over-betting at British racetracks. Demand and supply factors can explain the favorite-longshot bias, while empirical methods are suggested for identifying the influence of insider trading on such a bias. Results indicate that the favorite-long shot bias can be partially explained by an adverse selection problem arising from insider trading.

Racing, including track operation, Race Tracks, Racetracks, United Kingdom, Racetracks (Horse racing), Book-making (Betting), Bookmaking (Betting), Horse race betting

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