Is timing everything in horse betting? Bet amount, timing and bettors' returns in pari-mutuel wagering markets
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CitationSuhonen, Niko. Saastamoinen, Jani, Kainulainen. Tuomo. Forrest, David. (2018). Is timing everything in horse betting? Bet amount, timing and bettors' returns in pari-mutuel wagering markets. Economics letters, 173, 97-99. 10.1016/j.econlet.2018.09.021.
Noise trader models suggest that ‘smart money’ profits from uninformed speculators. This paper investigates how rates of return are associated with the timing of a bet and the amount staked in a pari-mutuel horse betting market. We employ a novel data set measured at the level of individual bettors on the Finnish monopoly operator’s online platform. Our findings suggest that, relative to other bets, late high-stakes wagers are more profitable. This implies that, along with timing, bet sizes should be accounted for when analysing market efficiency.