An Effective Approach for Exploiting the Inefficiencies of the Italian Football Betting Market

Abstract

In this paper, the author analyses the main inefficiencies of the Italian Serie-A betting market: in particular, using previous findings on the favourite-long shot bias, the team scoring home advantage and the league winner scoring advantage, a strategy aimed to outperform the market will be presented. By testing the betting scheme over the past 19 seasons, it was possible to obtain an average return per bet of 9.31%, with 16 of the 19 years resulting in positive financial returns. In order to verify the computations, different betting odds databases were used. The results obtained are particularly significant for two reasons: firstly all computations were performed on market average coefficients, leaving on the table an additional 3-4% of profit, which could be obtained by using best coefficients among bookmakers and secondly compared to market benchmarks and other betting strategies, the net profit is considerably higher. In particular other three strategies were used as a benchmark: the first one uses the favourite-long shot bias, the second one the Home factor and the third one the league favourite team advantage. All these betting schemes performed more poorly, with the second best strategy scoring on average 6% worse. After analysing possible future improvements, in the final section the author describes how the findings of this paper may be applied to other betting markets, such as different football leagues, basketball, hockey and tennis.