On the effect of taxation in the online sports betting market

Save this PDF as:

Size: px
Start display at page:

Download "On the effect of taxation in the online sports betting market"

Transcription

1 On the effect of taxation in the online sports betting market Juan Vidal-Puga Research Group in Economic Analysis Departamento de Estatística e IO Universidade de Vigo, Spain June 8, 2 We analyze the effect of taxation on the online sport betting market. Abstract This market is characterized by its negligible marginal costs. Taxation can be on volume (General Betting Duty) or on gross profit (Gross Profit Tax). We model the two most popular online sport betting bets: fixed-odds and spread, as compared with other traditional sport betting: parimutuel. We show that from the bettor s point of view taxation on gross profit is always preferable to taxation on volume. Keywords: taxation, online betting market. Work in progress. Latest version at: Financial support by the Spanish Ministerio de Ciencia y Tecnología and FEDER through grant ECO C2-/ECON and Xunta de Galicia through grant PXIB362299PR is gratefully acknowledged. Address: Facultade de Ciencias Sociais. Campus A Xunqueira. 365 Pontevedra. Spain.

2 Introduction Over the last few years, many European countries have been regulating their online betting and gaming sector. However, this regulation has not been done in a uniform way throughout the different countries. In general, the basic taxation scheme is based on two types of taxes: the General Betting Duty (GBD) is levied as a proportion of betting stakes; whereas the Gross Profits Tax (GPT) is levied as a proportion of the net revenue of the operators. Some examples: the United Kingdom applied a 6.75% tax on GBD until October 2, when it was replaced by a 5% tax in GPT ([6]). Italy applies a 2%-5% tax on GBD ([2]) since March 2. France applies a 8.5% tax on GBD ([3]) since 2. Cyprus applied a % tax on GPT until March 2, when it was replaced by a 3% tax on GBD. Recently, Spanish authorities approved a law that applies a 25% tax on GPT for some types of bets and a 5-22% tax on GBD for others, plus a general,% tax on GBD ( [5]). In the next table we summarize the data: GBD GPT UK 6.75% (until 2) 5% (since 2) Italy 2-5% - France 8.5% - Cyprus 3% (since 2) % (until 2) Spain 25%(parimutuel)+.%(general) 5-22% (fixed odds and spread) In the Spanish case, GBD has been the taxation scheme in the most traditional offline sport betting (la quiniela), which takes a parimutuel structure. In a parimutuel market, a winning bet pays off a proportional share of the total stake on all outcomes. However, the most popular online sport operators are specialized in another two markets: Fixed-odds and spread. In a fixed-odd market, the operator sets the odds for each possible outcome of the match, and the bettors decide whether they accept or not these odds. 2

3 In a spread market, the operator acts as a intermediator among the users, whom bargain the odds. For sport matches, a bet of monetary unit on a particular team yields a return of monetary units in case the team wins the match, and otherwise. In this context, an odd (, ) is defined as the probability assigned by the market. Notice that any risk-neutral bettor would find it profitable to bet at odd when its private probability estimation is higher than. In parimutuel and spread bets, the operator s profit comes from a commission on either the amount at risk or the winning amount (typically a 5% in online spread operators). In fixed-odds bets, the operator s profit comes from the odds, which should sum up more than % 2 for all the possible outcomes of the sport match 3. In this paper, we model the three types of market in a general setting. The regulator decides on the general taxing scheme (either GBD or GPT) and the operators decide on their commission (parimutuel and spread operators) or odds (fixed-odds operators). We assume that the spread betting commission is applied to the winning bets (as it is typical in online spread operators), whereas commission in parimutuel betting applies to the total amount (as in the Spanish regulation). We show that, from the online bettor s point of view, it is preferable a GPT scheme, in the following sense: In equilibrium, the odds are not affected by the taxation under GPT; whereas a GBD scheme would reduce the odds and hence the bettors utility. As opposed, in the parimutuel market GPT and GBD provide the same effect. These results agree with the ones presented by Smith ([]) and Paton et al. ([9][8]), whom analyze the effect of the different taxation schemes in Australian, UK and USA betting markets. These results, however, are more 2 In case the odds summed up less than %, it would be possible, by betting an appropriate amount of money on each possible match outcome, to win a positive amount irrespectively of the final match outcome. 3 The sum of the odds, called overround, provides a way to measure the operator advantage. 3

4 focused on offline betting operators and government revenue. Moreover, they take into account the marginal cost of each bet. As opposed, we assume that these marginal costs are negligible. There are other works that concentrate on parimutuel markets: Ottaviani and Sørensen ([7] and references herein) provide a model that explains the empirical evidence of underdogs overbet. These authors argue that this bias may be due to privately informed bettors. As opposed, we prove (Corollary 3.3) that the spread bet operator would get a higher profit if the underdog wins the game. An immediate intuition suggests that bettors have incentives to bet for the favorite in spread markets. Hence, the existence of arbitrators betting in different online operators would provide an alternative explanation for the underdog bias in parimutuel markets 4. Other works concentrate on fixed-odd markets. For example, Bag and Saha ( [] and references herein) study the externalities due to bribery in sports; and Levitt ([4]) argues that the operators may achieve higher profits by an accurate prediction of the match outcome. As far as we know, no similar research has been addressed for spread markets. In Section 2 we provide the model. In Section 3, we study the equilibrium payoffs in each of the three markets and provide the main results. 2 The model Two teams (home and away) play a competitive sport match; the match being drawn is not a possibility. There are three types of agents in the model: A continuum set B of bettors are interested in betting, but only if the odds are attractive; a finite set N of bookmakers that offer odds; and a regulator (Government) that decides on taxes. We assume that bettors are risk neutral and try to maximize their ex- 4 Work in progress. 4

5 pected profit. The bookmakers, on the other side, are risk adverse and try to maximize their monetary profit under the worst possible outcome of the match. Finally, the regulator tries to maximize social welfare (via tax income). Each bettor i B is characterized by its individual belief (i.e. the probability) x i that the home team wins ( x i is the probability that the away team wins); x i is distributed following an absolutely continuous cdf F with full support over (, ). There are three types of bookmakers: Fixed-odd bookmakers, spread bookmakers and parimutuel bookmakers. Fixed-odd bookmakers decide odds, A [, ] such that any bettor that bet on the home (away) team receives ( A ) in case of home (away) win, and in case of away (home) win. Spread bookmakers decide a commission c on the profit of any winning bettor. Parimutuel bookmakers decide a commission c on the stake of any bettor. Let N =,..., n} be the set of bookmakers. Each bookmaker k is characterized by its type (fixed-odds/spread/parimutuel) and a subset B k B of bettors. We assume that B,..., B n } is a partition of N. We assume that the conditional distribution of F is also continuous in each B k with full support over (, ). 3 The non-cooperative game The study the effect of taxation in the online market. Assume the regulator announces a tax, that could be a percentage υ on volume (GBD) or a percentage ρ on gross profit (GPT). The non-cooperative game has two steps: Step : Bookmakers observe υ or ρ and announce their odds (fixed-odds) or commission (spread/parimutuel). Step 2: bettors observe odds and commission on their respective bookmakers and choose to participate or not. 5

6 3. Fixed-odds bookmakers Bookmaker chooses odds and A. Bettors observe the odds and (simultaneously) choose s i D, H, A}. is is If s i = D, bettor i declines to bet (abstains) and its final payoff is zero. If s i = H, bettor i bets for the home team at odd and its final payoff ( ) u i = x i + ( x i ) ( ). If s i = A, bettor i bets for the away team at odd A and its final payoff ( ) u i = x i ( ) + ( x i ). A Let B H = i B : s i = H} and B A = i B : s i = A}. The bookmaker s final payoff is } ( υ) ( BH + B A ) u k = ( ρ) min H B H, ( υ) ( B H + B A ) A B A }} = ( ρ) ( υ) ( B H + B A ) max B H, B A. A Theorem 3. Given υ and ρ, there exists a (strong) subgame perfect equilibrium. Moreover, the odds in equilibrium are characterized by the maximization problem max ( ρ) ( υ) [ + subject to A ] } A = () A, A [, ], + A Proof. (sketch) Assume w.l.o.g. B k =. In Step 2 of the game, it is optimal for any bettor i B k with x i > to announce s i = H. Analogously, it is optimal for any bettor i B k with x i > A to announce s i = A. Hence, B H = and B A = A. 6

7 Equality () comes from } the fact that the bookmaker wants to minimize max B H, A B A, that is the maximum bettors winnings when either the home team ( B H ) or the away team ( A B A ) wins. Hence, in equilibrium both amounts should be equal. For a fixed A, there exists a unique that satisfies (). To see why, notice that f H () = is a strictly decreasing function on (, ) with f H ( + ) = + and f H ( ) = +, whereas f A () = is a strictly increasing function of (, ) with f A ( + ) = + and f A ( ) = +. Hence, for each A, there exists a unique with f H ( ) = f A ( A ). Moreover, the largest is, the largest A is. Let Π A : (, ) (, ) be the function that assigns to each its corresponding A. This function is well-defined and strictly increasing. Notice that the bet volume is given by B H + B A. Since tax v applies on volume, and ρ applies on profit, the bookmaker would maximize ( ρ) ( υ) [ B H + B A ] } B H which is the desired maximizing function. Furthermore, it is straightforward to check that there exists at least one maximizing (, ). From the previous result, we see that the bookmaker looks to balance the positive effect of a large volume (given by + A ) against the negative effect a big prize (given by = A A ). A large volume is obtained by setting low (and hence low A ). A low prize is obtained by setting high (and hence high A ). The effect of ρ (tax on profit) is irrelevant for the maximization problem. Hence, the optimal and A are independent of the chosen ρ. A different issue happens with υ, which gives less weight to the positive effect of a large volume. Hence, the bookmaker should set a high means that the utility of the bettors is reduced: (and high A ), which Corollary 3. Assume there exists a unique (strong) subgame perfect equilibrium. Then, 7

8 a) Taxes on volume (υ) decreases the bookmakers utility, increases the over-round and decreases the volume. Bettors utility is decreased. b) Taxes on profit (ρ) decreases the bookmakers utility, but maintains the over-round and the volume. Bettors utility remains unchanged. 3.2 Spread bookmakers Bookmaker chooses commission c (, ). Bettors observe the commission and (simultaneously) choose s i D} H, A} [, ]. If s i = D, bettor i declines to bet and its final utility is zero. If s i = (H, ), bettor i declares that it wants to bet for the home team at odd at most. If s i = (A, A ), bettor i declares that it wants to bet for the away team at odd at most A. The bookmaker matches (H, )-bettors with (A, A )-bettors that satisfy A with odds, such that: and A. The matching is done so that each volume (H, )-bettors is matched with a volume of (A, A )-bettors. The reason is that, in case home team wins, a volume of money is transferred from (A, A )-bettors to (H, )-bettors, so that each (H, )-bettor receives a gross winning (profit + bet): + = hence granting their request to bet for the home team at odd at least. Analogously, in case away team wins, a volume of money is transferred from (H, )-bettors to (A, A )-bettors, so that each (A, A )-bettor receives a gross winning (profit + bet): + = A hence granting their request to bet for the away team at odd at least A. Hence, is chosen so that Γ H + ΓH ΓA Γ A + ΓA ΓH 8

9 where Γ H = i B k : s i = (H, ), > } Γ H = i B k : s i = (H, )} Γ A = i B k : s i = (A, A ), A > } Γ A = i B k : s i = (A, )} If s i = (H, ) with >, bettor i bets for the home team at odd and its final payoff is u i = x i ( c) ( ) + ( x i ) ( ). (2) If s i = (A, A ) with A >, bettor i bets for the away team at odd and its final payoff is u i = x i ( ) + ( x i ) ( c) ( ). (3) If s i = D, or s i = (H, ) with <, or s i = (A, A ) with A <, bettor i does not bet and its final payoff is zero. When s i2 =, we have two cases: Γ H Case : Γ A. If s i = (H, ), then bettor i bets for the home team and his final payoff is (2). If s i = (A, ), then bettor i bets for the away team with probability u i = Γ H Γ A and its final payoff is ΓH [ ( )] x ΓA i ( ) + ( x i ) ( c). Γ H Case 2: Γ A. If s i = (A, ), then bettor i bets for the away team and his final payoff is (3). If s i = (H, ), then bettor i bets for the home team with probability u i = Γ A Γ H and its final payoff is ΓA [ ( ) ] x ΓH i ( c) + ( x i ) ( ). 9

10 Let Γ = Γ H Γ H Γ A Γ A. The final payoff for the bookmaker is c ( ( } ) u k = ( ρ) ) Γ A ΓH Γ min + min, Γ H c ( ( } ) ) Γ A + min, Γ H υ Γ Γ Γ A A ( ΓH + min } ) } ΓH, ΓA υ Γ = ( ρ) c min ( ΓA + min } ) ΓA, ΓH υ Γ Theorem 3.2 Given υ and ρ, there exists a (strong) subgame perfect equilibrium with undominated strategies 5. Moreover, the commission and odds in equilibrium are characterized by the maximization problem max, } ( c) c c( ) c( ) max ( ρ) c ( c (,) υ + ) ( c) c subject to c( ) c( ) =, c [, ] ( c) c (4) Proof. (sketch) Assume w.l.o.g. B k =. In Step 2 of the game, it is optimal for any bettor i B k to bet for the home team at odds when is such that which is equivalent to: ( ) x i ( c) + ( x i ) ( ) > < x i ( c) x i c x i > c ( ). 5 Undominated strategies are required in order to avoid meaningless equilibria of the form everybody chooses D. This requirement is not needed for strong subgame perfect equilibrium though.

11 Analogously, it is optimal for any bettor i B k to bet for the away team at odd when is such that which is equivalent to: x i ( ) + ( x i ) ( c) > x i < x i c + x i c ( c) c. ( ) > Given c (, ), we study the subgame that begins in step 2. Let c be the unique odd that satisfies c c c( c ) = c ( c) c c. c A (strong) subgame perfect equilibrium strategy is given as follows. Let i B k. Then, If x i > c c( c ), announce s i = (H, c ) If x i < c ( c) c c, announce s i = (A, c ) Otherwise, announce s i = D. In this equilibrium, the odds are c, c. Moreover: } c Γ H = i B k : x i > c ( c ) Γ H = } Γ A = i B k : x i < c ( c) c c Γ A =.

12 The payoff for the bookmaker is: ( ΓH + min }) Γ H, Γ A υ Γ u k = ( ρ) c min ( ΓA + min }) ΓA, ΓH υ Γ ( ) c υ Γ c( = ( ρ) c min c ) ( ) c ( c) c c υ Γ c = ( ρ) c c c c( max c ) c( c ) c ( c) c c ( υ + c ( c) ) c c c c( c ) } It is straightforward to check that the bigger c is, the bigger is. As c increases, the percentage of winners profits increase too, but this winner profit decreases because less bettors bet. Hence, the bookmaker looks to balance the positive effect of a big commission (hence big percentage of winnings) against the negative effect on the winnings (which decreases with c). Like fixed-odds bookmakers, the effect of ρ (tax on profit) is irrelevant for the maximization problem. Hence, the optimal c is independent of the chosen ρ. Again, a different issue happens with υ, which penalizes the effect of a large volume. Hence, like fixed-odds, the bookmaker would set a higher c, which means that the utility of the bettors is reduced: Corollary 3.2 Assume there exists a unique (strong) subgame perfect equilibrium. Then, a) Taxes on volume (υ) decreases the bookmakers utility, increases the commission and decreases the volume. Bettors utility is decreased. b) Taxes on profit (ρ) decreases the bookmakers utility, but maintains the commission and the volume. Bettors utility remains unchanged. As opposed to fixed-odds, the spread bookmaker is not indifferent to which team will win the match. In fact, the bookmaker would always prefer the underdog (non-favorite) to win the match, as next result shows: 2

13 Corollary 3.3 Let, be the odds in equilibrium. If >, then the 2 bookmaker s profit is bigger when the away team wins. If <, then bookmaker s profit is bigger when the home team wins. If =, then the spread 2 2 bookmaker s profit is independent on which team wins. Proof. From Theorem 3.2, v H = c( ) is the volume of bettors that bet for the home team, whereas v A = ( c) c is the volume of bettors that bet for the away team. When the home team wins, the gross profit of the bookmaker is c ( ) v. When the away team wins, the gross profit of the bookmaker is c ( ) v A. Moreover, we have v = v A. Hence, the bookmakers prefers the home (away) team to win when v H < v A (v H > v A ). Equivalently, the bookmaker prefers the home (away) team to win when v H va < ( v H va > ). Since v H va =, it only happens when is straightforward. ( > ), i.e. < 2 ( > 2 ). The result for = Parimutuel bookmakers < Bookmaker chooses commission c (, ). Bettors observe the commission and (simultaneously) choose s i D, H, A}. Let B H = i B : s i = H} and B A = i B : s i = A}. If s i = D, bettor i declines to bet and its final utility is zero. If s i = H, bettor i declares that it wants to bet for the home team. Its final payoff is: u i = x i B H + B A B H ( c). If s i = A, bettor i declares that it wants to bet for the away team. Its final payoff is: u i = ( x i ) B H + B A B A The bookmaker s final payoff is ( c). u k = ( ρ) c ( υ) ( B H + B A ). 3

14 Theorem 3.3 Given υ and ρ, in any (strong) subgame perfect equilibrium, each bettor i bets for the home team if x i > and for the away team if x i < A for some thresholds, A [, ]. Moreover, the commission and thresholds in equilibrium are characterized by the maximization problem [ A ] max ( ρ) ( υ) c + c (,) subject to = A A + B = c A, B. A Proof. (sketch) Assume (s i ) i B is an equilibrium strategy. Then: ( x i ) x i + A + A A These A and B are characterized by: c x i c x i A. + A A + A A = = c c which implies A A =. 4

15 and also + + A A = = + A = + A = c c c c. The existence of an equilibrium is straightforward. Corollary 3.4 Assume there exists a unique (strong) subgame perfect equilibrium. Then, taxes on volume (υ) and on profit (ρ) are equivalent; both decrease bookmaker s utility, but maintains the commission and the volume. Bettors utility remains unchanged. References [] Bag P.K. and Saha B. (2) Match-fixing under competitive odds. Games and Economic Behavior. Forthcoming. [2] Ficom Leisure Advisory & Investments (2) Update on Italy s Online Betting & Gaming Market. Available at fckeditor/informeitalia.pdf [3] Global Betting & Gaming Consultants (2) It s all about the tax. Available at [4] Levitt S.D. (24) Why are gambling markets organised so differently from financial markets? The Economic Journal 4, [5] Ley 3/2, de 27 de mayo, de regulación del juego (in Spanish) (2). Boletín Oficial del Estado 27(I), Available at 5

16 [6] National Audit Office (25) Gambling Duties. HM Customs and Excise. Report by the comtroller and Auditor General. HC. 38 Session Available at duties.aspx [7] Ottaviani M. and Sørensen P.N. (29) Surprised by the Parimutuel odds? American Economic Review 99(5), [8] Paton D., Siegel D.S. and Williams L.V. (2) Gambling taxation: a comment. The Australian Economic Review 34(4), [9] Paton D., Siegel D.S. and Williams L.V. (22) A policy response to the e-commerce revolution: the case of betting taxation in the UK. The Economic Journal 2, F296-F34. [] Smith J. (2) Gambling taxation: Public equity in the gambling business. Australian Economic Review 33,

On the e ect of taxation in the online sports betting market 1. Juan Vidal-Puga 1 SUMMARY

On the e ect of taxation in the online sports betting market 1. Juan Vidal-Puga 1 SUMMARY X Congreso Galego de Estatística e Investigación de Operacións Pontevedra, 3 4 5 de novembro de 20 On the e ect of taxation in the online sports betting market Universidade de Vigo Juan Vidal-Puga SUMMRY

More information

qwertyuiopasdfghjklzxcvbnmqwerty uiopasdfghjklzxcvbnmqwertyuiopasd fghjklzxcvbnmqwertyuiopasdfghjklzx cvbnmqwertyuiopasdfghjklzxcvbnmq

qwertyuiopasdfghjklzxcvbnmqwerty uiopasdfghjklzxcvbnmqwertyuiopasd fghjklzxcvbnmqwertyuiopasdfghjklzx cvbnmqwertyuiopasdfghjklzxcvbnmq qwertyuiopasdfghjklzxcvbnmqwerty uiopasdfghjklzxcvbnmqwertyuiopasd fghjklzxcvbnmqwertyuiopasdfghjklzx cvbnmqwertyuiopasdfghjklzxcvbnmq A Report wertyuiopasdfghjklzxcvbnmqwertyui For the Association of

More information

Understanding pricing anomalies in prediction and betting markets with informed traders

Understanding pricing anomalies in prediction and betting markets with informed traders Understanding pricing anomalies in prediction and betting markets with informed traders Peter Norman Sørensen Økonomi, KU GetFIT, February 2012 Peter Norman Sørensen (Økonomi, KU) Prediction Markets GetFIT,

More information

EFFICIENCY IN BETTING MARKETS: EVIDENCE FROM ENGLISH FOOTBALL

EFFICIENCY IN BETTING MARKETS: EVIDENCE FROM ENGLISH FOOTBALL The Journal of Prediction Markets (2007) 1, 61 73 EFFICIENCY IN BETTING MARKETS: EVIDENCE FROM ENGLISH FOOTBALL Bruno Deschamps and Olivier Gergaud University of Bath University of Reims We analyze the

More information

Market efficiency in person to person betting

Market efficiency in person to person betting Market efficiency in person to person betting David Paton (Nottingham University Business School) Michael Smith (Canterbury Christ Church University College) Leighton Vaughan Williams (Nottingham Business

More information

Working Paper Series

Working Paper Series RGEA Universidade de Vigo http://webs.uvigo.es/rgea Working Paper Series A Market Game Approach to Differential Information Economies Guadalupe Fugarolas, Carlos Hervés-Beloso, Emma Moreno- García and

More information

Remote gambling taxation reform

Remote gambling taxation reform Remote gambling taxation reform Who is likely to be affected? This measure will affect all gambling operators who supply remote gambling to UK customers. Some terrestrial gambling operators will also be

More information

Parimutuel versus Fixed-Odds Markets

Parimutuel versus Fixed-Odds Markets Parimutuel versus Fixed-Odds Markets Marco Ottaviani Peter Norman Sørensen Preliminary Draft April 2005 Abstract This paper compares the outcomes of parimutuel and competitive fixed-odds betting markets.

More information

Fixed odds bookmaking with stochastic betting demands

Fixed odds bookmaking with stochastic betting demands Fixed odds bookmaking with stochastic betting demands Stewart Hodges Hao Lin January 4, 2009 Abstract This paper provides a model of bookmaking in the market for bets in a British horse race. The bookmaker

More information

The Effects of Informed Bettors on Bookmaker Behavior

The Effects of Informed Bettors on Bookmaker Behavior The Effects of Informed Bettors on Bookmaker Behavior Casey Shamma Advised by Marciano Siniscalchi Abstract Previous literature on the market for sports gambling shows that bookmakers, who effectively

More information

ASYMMETRY. Vasiliki A. Makropoulou and Raphael N. Markellos 1. Athens University of Economics and Business

ASYMMETRY. Vasiliki A. Makropoulou and Raphael N. Markellos 1. Athens University of Economics and Business THE COMPETITIVE MARGIN OF BOOKMAKERS UNDER INFORMATION ASYMMETRY Vasiliki A. Makropoulou and Raphael N. Markellos 1 Athens University of Economics and Business ABSTRACT. In fixed-odds betting bookmakers

More information

Volume 30, Issue 4. Market Efficiency and the NHL totals betting market: Is there an under bias?

Volume 30, Issue 4. Market Efficiency and the NHL totals betting market: Is there an under bias? Volume 30, Issue 4 Market Efficiency and the NHL totals betting market: Is there an under bias? Bill M Woodland Economics Department, Eastern Michigan University Linda M Woodland College of Business, Eastern

More information

Unraveling versus Unraveling: A Memo on Competitive Equilibriums and Trade in Insurance Markets

Unraveling versus Unraveling: A Memo on Competitive Equilibriums and Trade in Insurance Markets Unraveling versus Unraveling: A Memo on Competitive Equilibriums and Trade in Insurance Markets Nathaniel Hendren January, 2014 Abstract Both Akerlof (1970) and Rothschild and Stiglitz (1976) show that

More information

The Fibonacci Strategy Revisited: Can You Really Make Money by Betting on Soccer Draws?

The Fibonacci Strategy Revisited: Can You Really Make Money by Betting on Soccer Draws? MPRA Munich Personal RePEc Archive The Fibonacci Strategy Revisited: Can You Really Make Money by Betting on Soccer Draws? Jiri Lahvicka 17. June 2013 Online at http://mpra.ub.uni-muenchen.de/47649/ MPRA

More information

REGULATING INSIDER TRADING IN BETTING MARKETS

REGULATING INSIDER TRADING IN BETTING MARKETS # Blackwell Publishers Ltd and the Board of Trustees of the Bulletin of Economic Research 1999. Published by Blackwell Publishers, 108 Cowley Road, Oxford OX4 1JF, UK and 350 Main Street, Malden, MA 02148,

More information

Microeconomic Theory Jamison / Kohlberg / Avery Problem Set 4 Solutions Spring 2012. (a) LEFT CENTER RIGHT TOP 8, 5 0, 0 6, 3 BOTTOM 0, 0 7, 6 6, 3

Microeconomic Theory Jamison / Kohlberg / Avery Problem Set 4 Solutions Spring 2012. (a) LEFT CENTER RIGHT TOP 8, 5 0, 0 6, 3 BOTTOM 0, 0 7, 6 6, 3 Microeconomic Theory Jamison / Kohlberg / Avery Problem Set 4 Solutions Spring 2012 1. Subgame Perfect Equilibrium and Dominance (a) LEFT CENTER RIGHT TOP 8, 5 0, 0 6, 3 BOTTOM 0, 0 7, 6 6, 3 Highlighting

More information

Gambling Tax Reform 2014

Gambling Tax Reform 2014 Gambling Tax Reform 2014 Information Note December 2013 1. Contents Page Foreword 3 Section 1 Introduction 4 Section 2 Liability for the Duties 6 Section 3 Regulatory Matters 9 Section 4 Definition of

More information

Behavioural Biases in the European Football Betting Market

Behavioural Biases in the European Football Betting Market Behavioural Biases in the European Football Betting Market Master Thesis Behavioural Economics Stefan van der Lee 333124 Supervisor: dr. T.L.P.R. Peeters 02-07-2015 This paper investigates the presence

More information

The NCAA Basketball Betting Market: Tests of the Balanced Book and Levitt Hypotheses

The NCAA Basketball Betting Market: Tests of the Balanced Book and Levitt Hypotheses The NCAA Basketball Betting Market: Tests of the Balanced Book and Levitt Hypotheses Rodney J. Paul, St. Bonaventure University Andrew P. Weinbach, Coastal Carolina University Kristin K. Paul, St. Bonaventure

More information

How Efficient is the European Football Betting Market? Evidence from Arbitrage and Trading Strategies

How Efficient is the European Football Betting Market? Evidence from Arbitrage and Trading Strategies How Efficient is the European Football Betting Market? Evidence from Arbitrage and Trading Strategies Nikolaos Vlastakis (i), George Dotsis (ii), Raphael N. Markellos (iii) This paper assesses the international

More information

The Favorite Longshot Bias in Sequential Parimutuel Betting with Non-Expected Utility Players 1

The Favorite Longshot Bias in Sequential Parimutuel Betting with Non-Expected Utility Players 1 The Favorite Longshot Bias in Sequential Parimutuel Betting with Non-Expected Utility Players 1 Frédéric KOESSLER 2 Anthony ZIEGELMEYER 3 Marie-Hélène BROIHANNE 4 January 2002 1 We have benefited greatly

More information

THE FAVOURITE-LONGSHOT BIAS AND MARKET EFFICIENCY IN UK FOOTBALL BETTING

THE FAVOURITE-LONGSHOT BIAS AND MARKET EFFICIENCY IN UK FOOTBALL BETTING Scottish Journal of Political Economy, Vol., No. 1, February 2000. Published by Blackwell Publishers Ltd, Cowley Road, Oxford OX 1JF, UK and 30 Main Street, Malden, MA 021, USA THE FAVOURITE-LONGSHOT BIAS

More information

Testing Efficiency in the Major League of Baseball Sports Betting Market.

Testing Efficiency in the Major League of Baseball Sports Betting Market. Testing Efficiency in the Major League of Baseball Sports Betting Market. Jelle Lock 328626, Erasmus University July 1, 2013 Abstract This paper describes how for a range of betting tactics the sports

More information

Persuasion by Cheap Talk - Online Appendix

Persuasion by Cheap Talk - Online Appendix Persuasion by Cheap Talk - Online Appendix By ARCHISHMAN CHAKRABORTY AND RICK HARBAUGH Online appendix to Persuasion by Cheap Talk, American Economic Review Our results in the main text concern the case

More information

Chapter 7. Sealed-bid Auctions

Chapter 7. Sealed-bid Auctions Chapter 7 Sealed-bid Auctions An auction is a procedure used for selling and buying items by offering them up for bid. Auctions are often used to sell objects that have a variable price (for example oil)

More information

Does bettor sentiment affect bookmaker pricing?

Does bettor sentiment affect bookmaker pricing? Does bettor sentiment affect bookmaker pricing? Raphael Flepp *, Stephan Nüesch and Egon Franck Abstract This article uses bookmaker betting volume data to test the influence of bettor sentiment on bookmaker

More information

To tax or not to tax? Free Bets and Free Plays

To tax or not to tax? Free Bets and Free Plays To tax or not to tax? Free Bets and Free Plays Introduction 20 May 2014 At the start of the consultation regarding the introduction of the new place of consumption ( POC ) rules for gambling duties, H.M.Treasury

More information

UZH Business Working Paper Series (ISSN 2296-0422)

UZH Business Working Paper Series (ISSN 2296-0422) Department of Business Administration UZH Business Working Paper Series (ISSN 2296-0422) Working Paper No. 324 Does Bettor Sentiment Affect Bookmaker Pricing? Raphael Flepp, Stephan Nüesch and Egon Franck

More information

Market Efficiency in Person-to-Person Betting

Market Efficiency in Person-to-Person Betting Market Efficiency in Person-to-Person Betting Michael A. Smith Senior Lecturer in Economics Canterbury Christ Church University North Holmes Road, Canterbury CT2 8DN United Kingdom Tel: +44 1227 76 7700

More information

University of Maastricht Faculty of Economics and Business Administration Maastricht, 7 December 2007 Sonnenschein, B.P.M.

University of Maastricht Faculty of Economics and Business Administration Maastricht, 7 December 2007 Sonnenschein, B.P.M. Measuring Efficiency in the Fixed Odd Football Betting Market: A detailed Analysis University of Maastricht Faculty of Economics and Business Administration Maastricht, 7 December 2007 Sonnenschein, B.P.M.

More information

arxiv:1112.0829v1 [math.pr] 5 Dec 2011

arxiv:1112.0829v1 [math.pr] 5 Dec 2011 How Not to Win a Million Dollars: A Counterexample to a Conjecture of L. Breiman Thomas P. Hayes arxiv:1112.0829v1 [math.pr] 5 Dec 2011 Abstract Consider a gambling game in which we are allowed to repeatedly

More information

6. Budget Deficits and Fiscal Policy

6. Budget Deficits and Fiscal Policy Prof. Dr. Thomas Steger Advanced Macroeconomics II Lecture SS 2012 6. Budget Deficits and Fiscal Policy Introduction Ricardian equivalence Distorting taxes Debt crises Introduction (1) Ricardian equivalence

More information

You Are What You Bet: Eliciting Risk Attitudes from Horse Races

You Are What You Bet: Eliciting Risk Attitudes from Horse Races You Are What You Bet: Eliciting Risk Attitudes from Horse Races Pierre-André Chiappori, Amit Gandhi, Bernard Salanié and Francois Salanié March 14, 2008 What Do We Know About Risk Preferences? Not that

More information

Optimal setting of point spreads

Optimal setting of point spreads Optimal setting of point spreads Jeremy Sandford University of Kentucky Paul Shea University of Kentucky December 19, 2011 Abstract We develop a theoretical model of competitive sports gambling markets

More information

Moral Hazard. Itay Goldstein. Wharton School, University of Pennsylvania

Moral Hazard. Itay Goldstein. Wharton School, University of Pennsylvania Moral Hazard Itay Goldstein Wharton School, University of Pennsylvania 1 Principal-Agent Problem Basic problem in corporate finance: separation of ownership and control: o The owners of the firm are typically

More information

A PROFITABLE STRATEGY IN THE PELOTA BETTING MARKET

A PROFITABLE STRATEGY IN THE PELOTA BETTING MARKET A PROFITABLE STRATEGY IN THE PELOTA BETTING MARKET Loreto Llorente D.T.2006/06 A PROFITABLE STRATEGY IN THE PELOTA BETTING MARKET Loreto Llorente a a Universidad Pública de Navarra, Campus Arrosadía, 31006

More information

Parimutuel Betting. Note by Émile Borel. Translated by Marco Ottaviani

Parimutuel Betting. Note by Émile Borel. Translated by Marco Ottaviani Parimutuel Betting Note by Émile Borel Translated by Marco Ottaviani Comptes Rendus Hebdomadaires des Séances de l Académie des Sciences (Proceedings of the French Academy of Sciences) 1938, 2 nd Semester,

More information

Late Informed Betting and the Favorite-Longshot Bias

Late Informed Betting and the Favorite-Longshot Bias Late Informed Betting and the Favorite-Longshot Bias Marco Ottaviani Peter Norman Sørensen July 2003 Abstract According to the favorite-longshot bias observed in parimutuel betting, the final distribution

More information

Investigación Operativa. The uniform rule in the division problem

Investigación Operativa. The uniform rule in the division problem Boletín de Estadística e Investigación Operativa Vol. 27, No. 2, Junio 2011, pp. 102-112 Investigación Operativa The uniform rule in the division problem Gustavo Bergantiños Cid Dept. de Estadística e

More information

THE DETERMINANTS OF SCORING IN NFL GAMES AND BEATING THE SPREAD

THE DETERMINANTS OF SCORING IN NFL GAMES AND BEATING THE SPREAD THE DETERMINANTS OF SCORING IN NFL GAMES AND BEATING THE SPREAD C. Barry Pfitzner, Department of Economics/Business, Randolph-Macon College, Ashland, VA 23005, bpfitzne@rmc.edu, 804-752-7307 Steven D.

More information

Market efficiency in greyhound racing: empirical evidence of absence of favorite-longshot bias

Market efficiency in greyhound racing: empirical evidence of absence of favorite-longshot bias Market efficiency in greyhound racing: empirical evidence of absence of favorite-longshot bias Anil Gulati, Western New England College, agulati@wnec.edu Shekar Shetty, Western New England College, sshetty@wnec.edu

More information

Betting in the Shadow of Match-Fixing

Betting in the Shadow of Match-Fixing Betting in the Shadow of Match-Fixing Parimal Kanti Bag Bibhas Saha July 0, 00 Abstract Two bookmakers compete in Bertrand fashion while setting odds on the outcomes of a sporting contest where an influential

More information

Herd Behavior and Underdogs in the NFL

Herd Behavior and Underdogs in the NFL Herd Behavior and Underdogs in the NFL Sean Wever 1 David Aadland February 2010 Abstract. Previous research has failed to draw any clear conclusions about the efficiency of the billion-dollar gambling

More information

Prices versus Exams as Strategic Instruments for Competing Universities

Prices versus Exams as Strategic Instruments for Competing Universities Prices versus Exams as Strategic Instruments for Competing Universities Elena Del Rey and Laura Romero October 004 Abstract In this paper we investigate the optimal choice of prices and/or exams by universities

More information

Gambling is relatively socially acceptable in the U.K. and

Gambling is relatively socially acceptable in the U.K. and Taxation and the Demand for Gambling: New Evidence from the United Kingdom Taxation and the Demand for Gambling: New Evidence from the United Kingdom Abstract - In October 2001, the U.K. government implemented

More information

Online Appendix for Student Portfolios and the College Admissions Problem

Online Appendix for Student Portfolios and the College Admissions Problem Online Appendix for Student Portfolios and the College Admissions Problem Hector Chade Gregory Lewis Lones Smith November 25, 2013 In this online appendix we explore a number of different topics that were

More information

The new Portuguese online. gambling tax regime in a. constitutional context. António Moura Portugal. 1 December 2015

The new Portuguese online. gambling tax regime in a. constitutional context. António Moura Portugal. 1 December 2015 The new Portuguese online gambling tax regime in a constitutional context António Moura Portugal 1 December 2015 Legal framework and tax objectives Legal framework for online betting (Decree-Law 66/2015

More information

21. Unverifiable Investment, Hold Up, Options and Ownership

21. Unverifiable Investment, Hold Up, Options and Ownership 21. Unverifiable Investment, Hold Up, Options and Ownership This chapter applies the tools of games with joint decisions and negotiation equilibrium to study the hold up problem in economics. We first

More information

Racetrack Betting and Consensus of Subjective Probabilities

Racetrack Betting and Consensus of Subjective Probabilities Racetrack Betting and Consensus of Subective Probabilities Lawrence D. Brown 1 and Yi Lin 2 University of Pennsylvania and University of Wisconsin, Madison Abstract In this paper we consider the dynamic

More information

AMS 5 CHANCE VARIABILITY

AMS 5 CHANCE VARIABILITY AMS 5 CHANCE VARIABILITY The Law of Averages When tossing a fair coin the chances of tails and heads are the same: 50% and 50%. So if the coin is tossed a large number of times, the number of heads and

More information

A Simple Model of Price Dispersion *

A Simple Model of Price Dispersion * Federal Reserve Bank of Dallas Globalization and Monetary Policy Institute Working Paper No. 112 http://www.dallasfed.org/assets/documents/institute/wpapers/2012/0112.pdf A Simple Model of Price Dispersion

More information

Optimal Auctions Continued

Optimal Auctions Continued Lecture 6 Optimal Auctions Continued 1 Recap Last week, we... Set up the Myerson auction environment: n risk-neutral bidders independent types t i F i with support [, b i ] residual valuation of t 0 for

More information

POINT SPREAD SHADING AND BEHAVIORAL BIASES IN NBA BETTING MARKETS. by Brad R. Humphreys *

POINT SPREAD SHADING AND BEHAVIORAL BIASES IN NBA BETTING MARKETS. by Brad R. Humphreys * RIVISTA DI ISSN 1825-6678 DIRITTO ED ECONOMIA DELLO SPORT Vol. VI, Fasc. 1, 2010 POINT SPREAD SHADING AND BEHAVIORAL BIASES IN NBA BETTING MARKETS by Brad R. Humphreys * SUMMARY: Introduction 1. A Simple

More information

Can Punters win? Are UK betting markets on sporting events. efficiently aggregating information?

Can Punters win? Are UK betting markets on sporting events. efficiently aggregating information? Can Punters win? Are UK betting markets on sporting events efficiently aggregating information? Unlike in financial markets, the prices in betting markets are primarily set by bookmakers, not demand. This

More information

HM CUSTOMS AND EXCISE. Gambling Duties

HM CUSTOMS AND EXCISE. Gambling Duties HM CUSTOMS AND EXCISE Gambling Duties REPORT BY THE COMPTROLLER AND AUDITOR GENERAL HC 188 Session 2004-2005 14 January 2005 EXECUTIVE SUMMARY 1 There are six types of gambling duties: lottery, general

More information

INFORMATION FOR OBSERVERS. Gaming Transactions (Agenda Paper 11(i))

INFORMATION FOR OBSERVERS. Gaming Transactions (Agenda Paper 11(i)) 30 Cannon Street, London EC4M 6XH, United Kingdom Tel: +44 (0)20 7246 6410 Fax: +44 (0)20 7246 6411 Email: iasb@iasb.org Website: www.iasb.org International Accounting Standards Board This observer note

More information

The Timing of Parimutuel Bets

The Timing of Parimutuel Bets The Timing of Parimutuel Bets Marco Ottaviani Peter Norman Sørensen May 2006 Abstract We propose a dynamic model of parimutuel betting that addresses the following three empirical regularities: a sizeable

More information

Fund Manager s Portfolio Choice

Fund Manager s Portfolio Choice Fund Manager s Portfolio Choice Zhiqing Zhang Advised by: Gu Wang September 5, 2014 Abstract Fund manager is allowed to invest the fund s assets and his personal wealth in two separate risky assets, modeled

More information

Lock! Risk-Free Arbitrage in the Japanese Racetrack Betting. Market

Lock! Risk-Free Arbitrage in the Japanese Racetrack Betting. Market Lock! Risk-Free Arbitrage in the Japanese Racetrack Betting Market Masahiro ASHIYA + January 2013 This paper finds that arbitrage was possible in two out of 175 Japanese thoroughbred races even after taking

More information

Market Power and Efficiency in Card Payment Systems: A Comment on Rochet and Tirole

Market Power and Efficiency in Card Payment Systems: A Comment on Rochet and Tirole Market Power and Efficiency in Card Payment Systems: A Comment on Rochet and Tirole Luís M. B. Cabral New York University and CEPR November 2005 1 Introduction Beginning with their seminal 2002 paper,

More information

CPC/CPA Hybrid Bidding in a Second Price Auction

CPC/CPA Hybrid Bidding in a Second Price Auction CPC/CPA Hybrid Bidding in a Second Price Auction Benjamin Edelman Hoan Soo Lee Working Paper 09-074 Copyright 2008 by Benjamin Edelman and Hoan Soo Lee Working papers are in draft form. This working paper

More information

The "Dutch Book" argument, tracing back to independent work by. F.Ramsey (1926) and B.deFinetti (1937), offers prudential grounds for

The Dutch Book argument, tracing back to independent work by. F.Ramsey (1926) and B.deFinetti (1937), offers prudential grounds for The "Dutch Book" argument, tracing back to independent work by F.Ramsey (1926) and B.deFinetti (1937), offers prudential grounds for action in conformity with personal probability. Under several structural

More information

We never talked directly about the next two questions, but THINK about them they are related to everything we ve talked about during the past week:

We never talked directly about the next two questions, but THINK about them they are related to everything we ve talked about during the past week: ECO 220 Intermediate Microeconomics Professor Mike Rizzo Third COLLECTED Problem Set SOLUTIONS This is an assignment that WILL be collected and graded. Please feel free to talk about the assignment with

More information

The Economics of Gamblin; and National Lotteries

The Economics of Gamblin; and National Lotteries The Economics of Gamblin; and National Lotteries Edited by Leighton Vaugfaan Williams Professor of Economics and Finance and Director, Betting Research Unit Nottingham Business School, Nottingham Trent

More information

Sequential lmove Games. Using Backward Induction (Rollback) to Find Equilibrium

Sequential lmove Games. Using Backward Induction (Rollback) to Find Equilibrium Sequential lmove Games Using Backward Induction (Rollback) to Find Equilibrium Sequential Move Class Game: Century Mark Played by fixed pairs of players taking turns. At each turn, each player chooses

More information

Capital Structure. Itay Goldstein. Wharton School, University of Pennsylvania

Capital Structure. Itay Goldstein. Wharton School, University of Pennsylvania Capital Structure Itay Goldstein Wharton School, University of Pennsylvania 1 Debt and Equity There are two main types of financing: debt and equity. Consider a two-period world with dates 0 and 1. At

More information

Prices, Point Spreads and Profits: Evidence from the National Football League

Prices, Point Spreads and Profits: Evidence from the National Football League Prices, Point Spreads and Profits: Evidence from the National Football League Brad R. Humphreys University of Alberta Department of Economics This Draft: February 2010 Abstract Previous research on point

More information

Horserace Betting Levy Board

Horserace Betting Levy Board Horserace Betting Levy Board Tasha Power Head of Operations BHA Overview Day Newmarket Racecourse Wednesday 30 th September 2015 History, Status and Function Early 1960s: Legalisation of off-course cash

More information

Football Bets Explained

Football Bets Explained Football Bets Explained www.eurofootballtrader.co.uk If you are new to football betting, or have never previously bet on specialist markets such as, Corners, Bookings, Goal Times, Handicaps, etc., this

More information

IS THE SOCCER BETTING MARKET EFFICIENT? A CROSS-COUNTRY INVESTIGATION USING THE FIBONACCI STRATEGY

IS THE SOCCER BETTING MARKET EFFICIENT? A CROSS-COUNTRY INVESTIGATION USING THE FIBONACCI STRATEGY The Journal of Gambling Business and Economics 2012 Vol 6 No 2 pp 29-49 IS THE SOCCER BETTING MARKET EFFICIENT? A CROSS-COUNTRY INVESTIGATION USING THE FIBONACCI STRATEGY Ender Demir 1 Advanced School

More information

Trends in electricity prices and their relation to the competitiveness and efficiency in EU countries

Trends in electricity prices and their relation to the competitiveness and efficiency in EU countries International Conference on Renewable Energies and Power Quality (ICREPQ 15) La Coruña (Spain), 25 th to 27 th March, 2015 exçxãtuäx XÇxÜzç tçw céãxü dâtä àç ]ÉâÜÇtÄ(RE&PQJ) ISSN 2172-038 X, No. 13, April

More information

Online Appendix Feedback Effects, Asymmetric Trading, and the Limits to Arbitrage

Online Appendix Feedback Effects, Asymmetric Trading, and the Limits to Arbitrage Online Appendix Feedback Effects, Asymmetric Trading, and the Limits to Arbitrage Alex Edmans LBS, NBER, CEPR, and ECGI Itay Goldstein Wharton Wei Jiang Columbia May 8, 05 A Proofs of Propositions and

More information

The Rational Gambler

The Rational Gambler The Rational Gambler Sahand Rabbani Introduction In the United States alone, the gaming industry generates some tens of billions of dollars of gross gambling revenue per year. 1 This money is at the expense

More information

Supplementary information on reform to betting duty system of horse race betting

Supplementary information on reform to betting duty system of horse race betting Supplementary information on reform to betting duty system of horse race betting LC Paper No. CB(2)1880/04-05(01) (a) The turnover and betting duty of football betting, lotteries, horse race betting for

More information

A Test for Inherent Characteristic Bias in Betting Markets ABSTRACT. Keywords: Betting, Market, NFL, Efficiency, Bias, Home, Underdog

A Test for Inherent Characteristic Bias in Betting Markets ABSTRACT. Keywords: Betting, Market, NFL, Efficiency, Bias, Home, Underdog A Test for Inherent Characteristic Bias in Betting Markets ABSTRACT We develop a model to estimate biases for inherent characteristics in betting markets. We use the model to estimate biases in the NFL

More information

BETTING AND THE RACING INDUSTRY

BETTING AND THE RACING INDUSTRY BETTING AND THE RACING INDUSTRY ROSS HAMILTON EXTERNAL AFFAIRS OFFICER Overview of British Racing Seminar, Newmarket, 30 September 2015 THE HISTORY OF BRITISH BETTING 1928 Racecourse Betting Act 1961 UK

More information

research paper series

research paper series research paper series Internationalisation of Economic Policy Programme Research Paper 2001/21 A Policy Response to the E-Commerce Revolution: The Case of Betting Taxation By D. Paton, D. Siegel and L.

More information

The epistemic structure of de Finetti s betting problem

The epistemic structure of de Finetti s betting problem The epistemic structure of de Finetti s betting problem Tommaso Flaminio 1 and Hykel Hosni 2 1 IIIA - CSIC Campus de la Univ. Autònoma de Barcelona s/n 08193 Bellaterra, Spain. Email: tommaso@iiia.csic.es

More information

Dr. Sally Gainsbury. Discovery 2011. April 7, 2011. centre for gambling education & research

Dr. Sally Gainsbury. Discovery 2011. April 7, 2011. centre for gambling education & research Dr. Sally Gainsbury Discovery 2011 April 7, 2011 centre for gambling education & research Current global state of Internet gambling and sports betting Canadian Internet sports betting Australian Internet

More information

RUHR. Commitment Problems and War in International Bargaining ECONOMIC PAPERS #403. Erwin Amann Nadine Leonhardt

RUHR. Commitment Problems and War in International Bargaining ECONOMIC PAPERS #403. Erwin Amann Nadine Leonhardt RUHR ECONOMIC PAPERS Erwin Amann Nadine Leonhardt Commitment Problems and War in International Bargaining #403 Imprint Ruhr Economic Papers Published by Ruhr-Universität Bochum (RUB), Department of Economics

More information

How to Sell a (Bankrupt) Company

How to Sell a (Bankrupt) Company How to Sell a (Bankrupt) Company Francesca Cornelli (London Business School and CEPR) Leonardo Felli (London School of Economics) March 2000 Abstract. The restructuring of a bankrupt company often entails

More information

Game Theory: Supermodular Games 1

Game Theory: Supermodular Games 1 Game Theory: Supermodular Games 1 Christoph Schottmüller 1 License: CC Attribution ShareAlike 4.0 1 / 22 Outline 1 Introduction 2 Model 3 Revision questions and exercises 2 / 22 Motivation I several solution

More information

Sharing Online Advertising Revenue with Consumers

Sharing Online Advertising Revenue with Consumers Sharing Online Advertising Revenue with Consumers Yiling Chen 2,, Arpita Ghosh 1, Preston McAfee 1, and David Pennock 1 1 Yahoo! Research. Email: arpita, mcafee, pennockd@yahoo-inc.com 2 Harvard University.

More information

The effect of exchange rates on (Statistical) decisions. Teddy Seidenfeld Mark J. Schervish Joseph B. (Jay) Kadane Carnegie Mellon University

The effect of exchange rates on (Statistical) decisions. Teddy Seidenfeld Mark J. Schervish Joseph B. (Jay) Kadane Carnegie Mellon University The effect of exchange rates on (Statistical) decisions Philosophy of Science, 80 (2013): 504-532 Teddy Seidenfeld Mark J. Schervish Joseph B. (Jay) Kadane Carnegie Mellon University 1 Part 1: What do

More information

Online gambling regulation in Spain -------------------------------------------------------------

Online gambling regulation in Spain ------------------------------------------------------------- Online gambling regulation in Spain If you would be wealthy, think of saving as well as getting. Benjamin Franklin (1706-1790) ------------------------------------------------------------- I. Introduction

More information

Avoiding longshots and parlays

Avoiding longshots and parlays STOCKHOLM SCHOOL OF ECONOMICS Master Thesis in Finance Avoiding longshots and parlays - An empirical study on the behavior of bettors acting on a fixed-odds betting market Olof Cristoferson 21010@student.hhs.se

More information

DOES SPORTSBOOK.COM SET POINTSPREADS TO MAXIMIZE PROFITS? TESTS OF THE LEVITT MODEL OF SPORTSBOOK BEHAVIOR

DOES SPORTSBOOK.COM SET POINTSPREADS TO MAXIMIZE PROFITS? TESTS OF THE LEVITT MODEL OF SPORTSBOOK BEHAVIOR The Journal of Prediction Markets (2007) 1 3, 209 218 DOES SPORTSBOOK.COM SET POINTSPREADS TO MAXIMIZE PROFITS? TESTS OF THE LEVITT MODEL OF SPORTSBOOK BEHAVIOR Rodney J. Paul * and Andrew P. Weinbach

More information

The Favourite-Longshot Bias in English Football

The Favourite-Longshot Bias in English Football The Favourite-Longshot Bias in English Football Abstract The favourite-longshot bias is an empirical phenomenon found in sports betting markets where favourites are systemically underbet relative to underdogs

More information

LEGISLATIVE ASSEMBLY FOR THE AUSTRALIAN CAPITAL TERRITORY BOOKMAKERS ACT 1985 EXPLANATORY MEMORANDUM DETERMINATION OF RULES FOR SPORTS BETTING

LEGISLATIVE ASSEMBLY FOR THE AUSTRALIAN CAPITAL TERRITORY BOOKMAKERS ACT 1985 EXPLANATORY MEMORANDUM DETERMINATION OF RULES FOR SPORTS BETTING 1997 LEGISLATIVE ASSEMBLY FOR THE AUSTRALIAN CAPITAL TERRITORY BOOKMAKERS ACT 1985 EXPLANATORY MEMORANDUM DETERMINATION OF RULES FOR SPORTS BETTING INSTRUMENT NO. 237 OF 1997 Circulated by the Authority

More information

Individual security and network design

Individual security and network design Individual security and network design Diego Cerdeiro Marcin Dziubiński Sanjeev Goyal FIT 2015 Motivation Networks often face external threats in form of strategic or random attacks The attacks can be

More information

Inter-market Arbitrage in Betting

Inter-market Arbitrage in Betting (2013) 80, 300 325 doi:10.1111/ecca.12009 Inter-market Arbitrage in Betting By EGON FRANCK,ERWIN VERBEEK and STEPHAN NU ESCH University of Zurich Final version received 20 March 2012. We show that a combined

More information

Testing Market Efficiency in a Fixed Odds Betting Market

Testing Market Efficiency in a Fixed Odds Betting Market WORKING PAPER SERIES WORKING PAPER NO 2, 2007 ESI Testing Market Efficiency in a Fixed Odds Betting Market Robin Jakobsson Department of Statistics Örebro University robin.akobsson@esi.oru.se By Niklas

More information

ECONOMIC DISCUSSION PAPERS

ECONOMIC DISCUSSION PAPERS ECONOMIC DISCUSSION PAPERS EDP 02/2010 A microeconometric analysis of participation in sports betting markets Brad R. Humphreys, Levi Perez Departamento de Economía Universidad de Oviedo Available online

More information

THE FRENCH ONLINE GAMBLING REGULATION BILL SPORTS BETTING HORSE RACING BETTING POKER PUBLIC INFORMATION

THE FRENCH ONLINE GAMBLING REGULATION BILL SPORTS BETTING HORSE RACING BETTING POKER PUBLIC INFORMATION THE FRENCH ONLINE GAMBLING REGULATION BILL SPORTS BETTING HORSE RACING BETTING POKER PUBLIC INFORMATION PRESENT SITUATION OF GAMBLING IN FRANCE General Prohibition (by 3 acts of Parliament) 1 1 2 Legal

More information

Applying the Kelly criterion to lawsuits

Applying the Kelly criterion to lawsuits Law, Probability and Risk (2010) 9, 139 147 Advance Access publication on April 27, 2010 doi:10.1093/lpr/mgq002 Applying the Kelly criterion to lawsuits TRISTAN BARNETT Faculty of Business and Law, Victoria

More information

Not Only What But also When: A Theory of Dynamic Voluntary Disclosure

Not Only What But also When: A Theory of Dynamic Voluntary Disclosure Not Only What But also When: A Theory of Dynamic Voluntary Disclosure Ilan Guttman, Ilan Kremer, and Andrzej Skrzypacz Stanford Graduate School of Business September 2012 Abstract The extant theoretical

More information

ECONOMICS OF DEBT COLLECTION: ENFORCEMENT OF CONSUMER CREDIT CONTRACTS

ECONOMICS OF DEBT COLLECTION: ENFORCEMENT OF CONSUMER CREDIT CONTRACTS ECONOMICS OF DEBT COLLECTION: ENFORCEMENT OF CONSUMER CREDIT CONTRACTS Viktar Fedaseyeu Bocconi University Bob Hunt Federal Reserve Bank of Philadelphia BEROC, May 28, 2014 Debt collection Debt collection

More information

Questions raised by deputations

Questions raised by deputations LC Paper No. CB(2)2674/04-05(02) I Questions raised by deputations (1)(a) The Hong Kong Jockey Club (HKJC) has made an assessment of the illegal betting market on the basis of a combination of internal

More information

A POLICY RESPONSE TO THE E-COMMERCE REVOLUTION: THE CASE OF BETTING TAXATION IN THE UK*

A POLICY RESPONSE TO THE E-COMMERCE REVOLUTION: THE CASE OF BETTING TAXATION IN THE UK* The Economic Journal, 112 (June), F296 F314.. Published by Blackwell Publishers, 108 Cowley Road, Oxford OX4 1JF, UK and 350 Main Street, Malden, MA 02148, USA. A POLICY RESPONSE TO THE E-COMMERCE REVOLUTION:

More information

Review Horse Race Gambling and Side Information Dependent horse races and the entropy rate. Gambling. Besma Smida. ES250: Lecture 9.

Review Horse Race Gambling and Side Information Dependent horse races and the entropy rate. Gambling. Besma Smida. ES250: Lecture 9. Gambling Besma Smida ES250: Lecture 9 Fall 2008-09 B. Smida (ES250) Gambling Fall 2008-09 1 / 23 Today s outline Review of Huffman Code and Arithmetic Coding Horse Race Gambling and Side Information Dependent

More information