Due to the use of sports wagering market data as a laboratory to test the Efficient Markets Hypothesis, sports bettors have been assumed to behave as investors. With the rejection of the balanced book hypothesis and the persistent support of market efficiency, the notion of the sports bettor as investor should be in doubt. Using betting volume data from online sportsbooks, bettors are shown to substitute out of baseball betting into football betting when the season starts. The authors argue that these findings are consistent with consumer behavior, but inconsistent with the notion of bettors as investors.
ConliskJ. (1993). The utility of gaambling. Journal of Risk and Uncertainty, 6, 255–275.
2.
GandarJ. M.ZuberR. A.JohnsonR. S.DareW. (2002). Re-examining the betting market on Major League Baseball Games: Is there a reverse favorite-longshot bias?Applied Economics, 34, 1309–1317.
3.
LevittS. (2004). Why are gambling markets organized so differently from financial markets?The Economic Journal, 114, 223–246.
4.
PankoffL. (1968). Market efficiency and football betting. Journal of Business, 41, 203–214.
5.
PaulR.WeinbachA. (2007). Does sportsbook.com set pointspreads to maximize profits? Tests of the Levitt model of sportsbook behavior. Journal of Prediction Markets, 1, 209–218.
6.
PaulR.WeinbachA. (2008). Price setting in the NBA gambling market: Tests of the Levitt model of sportsbook behavior. International Journal of Sport Finance, 3, 2–18.
7.
PaulR.WeinbachA.WeinbachC. (2003). Fair bets and profitability in college football gambling. Journal of Economics and Finance, 27, 236–242.
8.
SauerR.BrajerV.FerrisS.MarrM. (1988). Hold your bets: Another look at the efficiency of the gambling market for National Football League games. Journal of Political Economy, 96, 206–213.
9.
WoodlandL. M.WoodlandB. M. (1994). Market efficiency and the favorite-longshot bias: The baseball betting market. Journal of Finance, 49, 269–280.
10.
ZuberR.GandarJ.BowersB. (1985). Beating the spread: Testing the efficiency of the gambling market for National Football League games. Journal of Political Economy, 93, 800–806.
