This paper assesses the international effi ciency of the European football betting market by examining the forecastability of match outcomes on the basis of the information contained in different sets of online and fi xed odds quoted by six major bookmakers. The paper also investigates the profi tability of strategies based on: combined betting, simple heuristic rules, regression models and prediction encompassing. The empirical results show that combined betting across different bookmakers can lead to limited but highly profi table arbitrage opportunities. Simple trading rules and betting strategies based on forecast encompassing are found capable of also producing signifi cant positive returns. Despite the deregulation, globalization and increased competition in the betting industry over recent years, the predictabilities and profi ts reported in this paper are not fully consistent with weak-form market effi ciency.
This paper assesses the international effi ciency of the European football betting market by examining the forecastability of match outcomes on the basis of the information contained in different sets of online and fi xed odds quoted by six major bookmakers. The paper also investigates the profi tability of strategies based on: combined betting, simple heuristic rules, regression models and prediction encompassing. The empirical results show that combined betting across different bookmakers can lead to limited but highly profi table arbitrage opportunities. Simple trading rules and betting strategies based on forecast encompassing are found capable of also producing signifi cant positive returns. Despite the deregulation, globalization and increased competition in the betting industry over recent years, the predictabilities and profi ts reported in this paper are not fully consistent with weak-form market effi ciency.
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