Contemporary Issues in Sports Economics

Contemporary Issues in Sports Economics

Participation and Professional Team Sports

New Horizons in the Economics of Sport series

Edited by Wladimir Andreff

The development of sports economics has exploded in recent years, and this well-researched and relevant book explores some of the most critical themes. Contemporary Issues in Sports Economics examines topics that have previously received little attention in the literature, such as the determinants and social impacts of sports participation including the link to crime levels. The distinguished authors also discuss some of the less investigated aspects of professional team sports, including: • sports betting, financing and governance; • the impact of low scoring matches on competitive balance and fan appeal in European football; and • the effect on player transfers of a luxury tax on club payrolls in Major League Baseball.

Chapter 6: The Role of Information in Professional Football and the German Football Betting Market

Frank Daumann and Markus Breuer

Subjects: economics and finance, sports


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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