Efficiency and arbitrage across parimutuel wagering pools

Lock! Risk-Free Arbitrage in the Japanese Racetrack Betting Market

“…Therefore, she can compute the amount of ex post profit of her bets in advance. As Gramm, McKinney, and Owens (2012) and others point out, however, one can only attempt to be one of the last bettors in practice. Mori and Hisakado (2009) find that almost half of the win tickets are bought within the last 10 min in the races of the Japan Racing Association.…”

The favorite-longshot bias and the impact of experience

“…As one might presume that late bets are more likely to be placed by experienced bettors, this is consistent with our finding that experienced bettors are far less prone to the FLB. Finally, Gramm, McKinney and Owens (2012) also find an FLB in their data set from the horse race market in the US, but show that the results are not pronounced enough for identifying profitable betting strategies. This corresponds to our result that, even though experienced bettors are far more successful than inexperienced bettors, their average gains are slightly negative, so that there seem to be no systematically profitable betting strategies.…”