Biases in the Football Betting Market
6 Pages Posted: 31 May 2017 Last revised: 10 Mar 2018
Date Written: May 30, 2017
This research uses football online betting odds of a broad variety of matches and bookmakers to identify known biases in odds pricing, namely the favorite-longshot bias and the away-favorite bias. Furthermore, it tries to answer the question whether a naive strategy of betting against these biases can be profitable. Our findings are consistent with previous research, confirming the existence of the favorite-longshot bias, but turn out to be in contrast with regard to the away-favorite bias, for which there is little evidence in the data. Also, we find that a strategy of betting against the favorite-longshot bias can be marginally profitable, whereas bets in favor of it result in large losses on average.
Keywords: betting market, sports forecasting, bias analysis, favorite-longshot bias, betting strategy
JEL Classification: Z2, G11, G14
Suggested Citation: Suggested Citation