Analyzing Information Efficiency in the Betting Market for Association Football League Winners

Main Article Content

Lars Magnus Hvattum


Sports betting markets have attracted a fair amount of research over the years. For association football, most of this research has focused on predicting the outcome of single matches and hence on the evaluating the efficiency of the match results betting markets. This paper presents a study on the betting market for league winners, a market that operates for almost a full year and therefore operates under different conditions than the relatively short-lived match results markets. Attempts are made to analyze both weak and semi-strong forms of information efficiency. Although the results are mixed, there are some indications that the market is inefficient with respect to both forms of information.

Article Details

Author Biography

Lars Magnus Hvattum, The Norwegian University of Science and Technology

Professor in industrial economics and optimization, at the Department of Industrial Economics and Technology Management, The Norwegian University of Science and Technology, Trondheim, Norway.


W. Antweiler. Long-term prediction markets. The Journal of Prediction Markets, 6:43–61, 2012., 2010. Accessed between 2008 and 2010.

G.W. Brier. Verification of weather forecasts expressed in terms of probability. Monthly Weather Review, 78:1–3, 1950.

M. Cain, D. Law, and D. Peel. The favourite-longshot bias and market efficiency in UK football betting. Scottish Journal of Political Economy, 47:25–36, 2000.

A.C. Constantinou, N.E. Fenton, and M. Neil. pi-football: a Bayesian network model for forecasting association football match outcomes. Knowledge-Based Systems, 36:322–339, 2012.

B. Deschamps and O. Gergaud. Efficiency in betting markets: evidence from English football. The Journal of Prediction Markets, 1:61–73, 2007.

M.J. Dixon and S.C. Coles. Modelling association football scores and inefficiencies in the football betting market. Applied Statistics, 46:265–280, 1997.

S. Dobson and J. Goddard. The Economics of Football. Cambridge University Press, Cambridge, 2001.

A.E. Elo. The Rating of Chessplayers, Past and Present. Arco Publishing, New York, 1978., 2010. Accessed between 2008 and 2010.

D. Forrest, J. Goddard, and R. Simmons. Odds-setters as forecasters: the case of English football. International Journal of Forecasting, 21:551–564, 2005.

I. Graham and H. Stott. Predicting bookmaker odds and efficiency for UK football. Applied Economics, 40:99–109, 2008.

P.K. Gray and S.F. Gray. Testing market efficiency: evidence from the NFL sports betting market. The Journal of Finance, 52:1725–1737, 1997.

W.H. Greene. Econometric Analysis. Prentice Hall, Upper Saddle River, NJ, 4th edition, 1999.

I.D. Hill. Association football and statistical inference. Applied Statistics, 23:203–208, 1974.

L.M. Hvattum and H. Arntzen. Using ELO ratings for match result prediction in association football. International Journal of Forecasting, 26:460–470, 2010.

D. Johnstone. Economic darwinism: who has the best probabilities? Theory and Decision, 62: 47–96, 2007.

R.H. Koning, M. Koolhaas, G. Renes, and G. Ridder. A simulation model for football championships. European Journal of Operational Research, 148:268–276, 2003.

C. Leitner, A. Zeileis, and K. Hornik. Forecasting sports tournaments by ratings of (prob)abilities: A comparison for the EURO 2008. International Journal of Forecasting,

B. Min, J. Kim, C. Choe, H. Eom, and R.I. McKay. A compound framework for sports results prediction: A football case study. Knowledge-Based Systems, 21:551–562, 2008.

P.F. Pope and D.A. Peel. Information, prices and efficiency in a fixed odds betting market. Economica, 56:323–341, 1989.

H. Rue and Ø. Salvesen. Prediction and retrospective analysis of soccer matches in a league. The Statistician, 49:399–418, 2000.

C. Schmidt, M. Strobel, and H.O. Volkland. Accuracy, certainty and surprise — a prediction market on the outcome of the 2002 FIFA world cup. In P. Andersson, P. Ayton, and C. Schmidt, editors, Myths and Facts about Football: The Economics and Psychology of the

World’s greatest Sport, pages 303–325. Cambridge Scholars Press, Cambridge, 2008.

H.O. Stekler, D. Sendor, and R. Verlander. Issues in sports forecasting. International Journal

of Forecasting, 26:606–621, 2010.

A.K. Suzuki, L.E.B. Salasar, J.G. Leite, and F. Louzada-Neto. A Bayesian approach for predict-

ing match outcomes: the 2006 (association) football world cup. Journal of the Operational

Research Society, 61(10):1530–1539, 2010.

L. Vaughan Williams, editor. Information Efficiency in Financial and Bettimg Markets. Cam-

bridge University Press, Cambridge, 2005.

R.C. Vergin. Overreaction in the NFL point spread market. Applied Financial Economics, 11: 497–509, 2001.

I.H. Witten and E. Frank. Data mining: practical machine learning tools and techniques. Elsevier, San Francisco, CA, 2005.