Market Efficiency and Profitable Wagering in the National Hockey League: Can Bettors Score on Longshots?

2001/04/01 by Linda M. Woodland, Bill M. Woodland
Economics, Econometrics and Finance · Psychology · #Sports Analytics and Performance #Gambling Behavior and Treatments

paper · doi:10.1002/j.2325-8012.2001.tb00385.x

Abstract

Sports betting and racetrack markets continue to provide researchers with opportunities to test the efficient market hypothesis. This paper investigates the efficiency of a relatively new sports betting market, the National Hockey League, for 1990‐1996. The market is found to be somewhat inefficient and simple wagering strategies are identified that result in profitable returns. Consistent with previous research for football and baseball, bettors in hockey are inclined to overbet favorites relative to their observed chance of winning. Interestingly, the market does not appear to be converging to efficiency.

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