Globalisation and Efficiency in the Fixed-odds Soccer Betting ... - Istituti

ookmakers would have been poorly positioned to exploit the growing international market for
their product if tax had had to be levied, as it would have been if they had remained based at
home. Since British households could also use offshore branches of familiar bookmakers the
abolition of betting duty became inevitable and this occurred in 2001.
The reduction in transactions costs inherent in the removal of tax (essentially optional
since the establishment of offshore operations in 1999) severely limits the ability of bookmakers
henceforth to offer biased odds. The importance of transactions costs is, of course, central to
whether a market will display efficiency. If there were no transactions costs in the form of
bookmaker over-round or tax, then any bias in the odds would be non-sustainable because it
would create an opportunity for positive gain which arbitrageurs would be expected to eliminate.
The removal of tax (and greater flexibility in taking singles bets at least on Premier League
games) has greatly reduced the extent to which transactions costs impede the arbitrage process in
soccer betting. It is unsurprising therefore that, while our study confirms ‘traditional’ biases in
the betting market up to 1999, there is a rapid move to ‘efficiency’ by 2001.
It is perhaps anomalous that the ‘DIFFATTEND’ bias was still present in D2/D3 at the
end of our period and evidently still capable of generating opportunities for positive returns.
Thus far, betting on lower divisions has still been primarily a domestic market. Information is
much less readily available on lower-tiers of English soccer, so transactions costs are effectively
still high for potential arbitrageurs. Bookmakers have, evidently, still felt able to ‘bias’ the odds
for the presence in (or dominance of ) the market by fan-bettors. Equally, bookmakers still
rigorously protect themselves by restrictions against singles betting for these less high-profile
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