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- Title
LATE MONEY AND BETTING MARKET EFFICIENCY: EVIDENCE FROM AUSTRALIA.
- Authors
Gramm, Marshall; McKinney, C. Nicholas; Parker, Randall E.
- Abstract
Timing and information are two important variables affecting participants in a prediction market. In parimutuel betting it is of added importance since prices are determined by the final amount wagered on each betting interest. An informed bettor or insider, defined as an individual whose perceptions of the true probability of an outcome are better than those of the general public as derived from the tote board, has to evaluate when is the optimal time to place a bet. As reported by Gramm and McKinney (2009), approximately 40% of all the money wagered in a given race is taken through the betting windows within the final minute in which a gambler can place his bet. Even when the bell rings and the gates open with the horses running down the track, the final odds are not known until all of the betting interests are added up and the size of the betting pool is determined. Thus, the impact of late money is not known until the final update of the tote board which only happens after the race commences. The advent of internet gambling has accentuated this late money betting since internet gambling is tied into the same parimutuel pools that exist at the track where the race is happening live and there are no lines to stand in to be sure a gambler can get his bet down.
- Subjects
AUSTRALIA; GAMBLING; GAMBLERS; WAGERS; PRICES; ECONOMICS
- Publication
Journal of Gambling Business & Economics, 2016, Vol 10, Issue 2, p11
- ISSN
1751-7990
- Publication type
Article
- DOI
10.5750/jgbe.v10i2.1246