The Favourite‐Longshot Bias and Market Efficiency in UK Football betting

It is shown that the individual fixed‐odds betting market on UK football exhibits the same favourite‐longshot bias as that found in horse‐racing. The bias appears both in betting on results (home win, away win or draw) and in betting on specific scores, and there are certain trading rules which appear to be profitable. Poisson and Negative Binomial regressions are carried out to estimate the mean number of goals scored by a team in a match with given market odds for the various outcomes. Tables of odds for individual scores are derived and these appear to fit the actual outcomes far better than those of the bookmaker.