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randomness...but how does this differ from sports gambling, exactly?
Red Sox Reward Futures Traders Who Favored Them Over Yankees
"The Boston Red Sox, who became the first team in Major League Baseball history to win a playoff series after trailing three games to none, rewarded the futures traders who made them favorites against the New York Yankees.
"The payoff was even greater for speculators who wagered on the Red Sox when their futures contracts were selling for pennies on the dollar.
"Traders were paying more for Boston contracts than for New York futures before the American League Championship Series, even though the Red Sox haven't won baseball's title since 1918, and the Yankees have won four of the past eight.
"``It's phenomenal how efficient the sports markets are,'' said Mike Knesevitch, a spokesman for TradeSports.com, an online exchange where futures contracts were traded on the series. ``I'm always amazed.''
"Traders on the Dublin, Ireland-based exchange who were betting on a Red Sox victory were able to redeem contracts that were almost worthless four days earlier. Traders were able to increase their investments 40-fold if they bought Boston contracts at their low and held them until today."
http://quote.bloomberg.com/apps/news?pid=10000103&sid=aMJUmSbh.O8o&refer=us
Red Sox Reward Futures Traders Who Favored Them Over Yankees
"The Boston Red Sox, who became the first team in Major League Baseball history to win a playoff series after trailing three games to none, rewarded the futures traders who made them favorites against the New York Yankees.
"The payoff was even greater for speculators who wagered on the Red Sox when their futures contracts were selling for pennies on the dollar.
"Traders were paying more for Boston contracts than for New York futures before the American League Championship Series, even though the Red Sox haven't won baseball's title since 1918, and the Yankees have won four of the past eight.
"``It's phenomenal how efficient the sports markets are,'' said Mike Knesevitch, a spokesman for TradeSports.com, an online exchange where futures contracts were traded on the series. ``I'm always amazed.''
"Traders on the Dublin, Ireland-based exchange who were betting on a Red Sox victory were able to redeem contracts that were almost worthless four days earlier. Traders were able to increase their investments 40-fold if they bought Boston contracts at their low and held them until today."
http://quote.bloomberg.com/apps/news?pid=10000103&sid=aMJUmSbh.O8o&refer=us
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Date: 2004-10-21 12:34 pm (UTC)Yah, good question, both in the particular situation and in general. On the one hand, increased competition from internet gambling and futures markets probably skims off some of their customer base. On the other, the increased advertising and reduced social stigma probably grows the overall market. So I'm not sure what the overall market effect is. And you can argue that nearly all the people who are betting through a bookie probably aren't the people who would participate in an Internet futures market.
In the particular situation a really smart, Internet-savvy bookie might lay off some of their risk by putting some of the wagered money into the futures market. It's possible you could make a fair bit of money in arbitrage, although between the legal issues and the nasty competitive pressure it's not a business I'm itching to get into.
Bet some people placing bets on the Sox after Game 3 made out like bandits.
Yah, I would think so, given that "When the Red Sox fell behind three games to none, $10 futures contracts on a Red Sox win were trading for 25 cents." That's a 40 for 1 payoff; I wonder if the bookies were giving odds like that. If not, there's your opportunity for profit as a bookie.