Participation and Professional Team Sports
New Horizons in the Economics of Sport series
Edited by Wladimir Andreff
Chapter 6: The Role of Information in Professional Football and the German Football Betting Market
Frank Daumann and Markus Breuer INTRODUCTION 1. The situation for sport betting in Germany is anything but clear from a legal point of view. Since the public provider Oddset, run by the German Lotto-Toto-Block, started its business in 2000, several private companies, such as Bwin (formerly known as bet and win) have also wanted to offer sport betting to German citizens. Local laws accept public monopolies in cases where this constraint reflects public concerns, like the prevention of pathological gambling. In 2006, the German Constitutional Court declared the present monopoly to be illegal (Daumann/Breuer, 2008). Despite that decision, private betting is a grey area in law in Germany. Figures like turnover have to be regarded carefully, as online providers operating from foreign states account for a large part of the market. From an economic point of view, betting markets provide an ideal arena for testing market efficiency (Brailsford et al., 1995; Gray/ Gray, 1997). In contrast to financial markets, which are normally the focus of efficiency studies, outcomes in sports are well defined (Brailsford et al., 1995). An aspect which has not been analysed so far is the question of the influence of the information level during a season. In general, we can assume an increasing amount of information concerning the strength of single players and whole teams (in team sports), as well as injuries and so on, from the first match on. That information has to be processed by bookmakers, as well as bettors, and should enhance forecasts regarding...
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