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The Efficiency of Australian Football Betting Markets
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Timothy J. Brailsford, Philip K. Gray, Stephen A. Easton and Stephen F. Gray
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Abstract
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This paper examines the efficiency of the two major Australian football betting markets: the Australian Rugby League (ARL)FootyTAB market and the Australian Football League (AFL) Footywin market. Probit and ordered probit models are tailored to the unique structures of the markets. This circumvents some potential econometric problems, and also allows us to test betting strategies in which a bet is placed only when there is a high ex-ante probability of sucess. Our probit models are successful in predicting game outcomes in both the ARL and AFL. While several of our betting strategies generate significant profits, both in-sample and out-of-sample, we offer a number of reasons why we are cautious about interpreting these results as conclusive evidence of market inefficiency.
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Keywords
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MARKET EFFICIENCY; SPORTS BETTING; PROBIT.
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Contact Details
Timothy J. Brailsford
Department of Accounting and Finance
University of Melbourne
Parkville VIC 3052
Philip K. Gray
School of Economics and Finance
Queensland University of Technology
Brisbane QLD 4001
Stephen A. Easton
Department of Accounting and Finance
Monash University
Clayton VIC 3168
Stephen F. Gray
Fuqua School of Business
Duke University
Durham NC 27708
U.S.A.
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We are grateful to Barry Oliver, Peter Whelan, and participants at the 1995 AAANZ conference in Melbourne for valuable comments and suggestions. Funding from Coopers and Lybrand is gratefully acknowledged.
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