Comparing two methods for testing the efficiency of sports betting markets

Main finding

Tests based on normalised probabilities behave well; tests based on raw inverse odds do not, and are biased against finding a favourite–longshot bias.

Limitations

A methods paper: it concerns how to test efficiency, not whether any strategy is profitable.

Study details

Authors

Tadgh Hegarty, Karl Whelan

Published

2024

Venue

Sports Economics Review 8, 100042

Status

Published

Evidence type

Peer-reviewed methods

Evidence strength

Moderate (our assessment of how much weight the finding can bear)

Sport

Tennis and association football

Markets

Bookmaker fixed odds

Method

Compares two regression designs for testing efficiency, one using normalised (de-vigged) probabilities and one using raw inverse odds, on large datasets and realistic simulations.

Sample

Large historical tennis and football datasets.

Replication

Not applicable.

Read the original

doi:10.1016/j.serev.2024.100042 (opens in a new tab)

Our summary is an original paraphrase for education. Verification: Bibliographic record checked against publisher, index or author listings. Checked 2026-10-25.