Betting on the Market: The Influence of Match-Day Odds on Price Reactions of European Football Clubs
Keywords
Capital market efficiency, football match outcomes, betting odds, stock prices, expected and unexpected outcomes
Abstract
This research investigates the relationship between football match outcomes, betting odds and the stock prices of publicly traded European football clubs, spanning from 11 February 2004 to 7 April 2022. Drawing data from 12 major European and publicly traded clubs, the study utilised betting odds as a key metric. These odds, aggregated from the Odds Portal, serve as a gauge for expected versus unexpected match outcomes. Preliminary findings showed a market value increase of 0.44% after a win and a decrease of 1.08% post-defeat. Moreover, deviations from betting odds predictions significantly influenced stock prices, with unexpected wins and losses resulting in a 2.27% increase and 1.35% decrease, respectively. The temporal dimension of matches revealed differential stock price reactions based on the match’s placement within the season. Additionally, National League games, due to their economic implications, showcased a distinct impact on stock prices compared to Cup games. This study accentuates the instrumental role of betting odds in interpreting the interplay between football outcomes and stock market dynamics, enhancing our comprehension of capital market efficiency. The results suggest that the capital market efficiently takes into account the published betting odds.
Acknowledgments
Funding
The research received no funds.
Declaration of Conflicting Interests
The author declared no potential conflicts of interest with respect to the research, authorship, and publication of the article.
Declaration about the scope of AI utilization
The authors did not use an AI tool in the preparation of the article
Recommended Citation
Alterauge, P., & Mehlhorn, M. (2024). Betting on the Market: The Influence of Match-Day Odds on Price Reactions of European Football Clubs. Journal of Banking and Financial Economics, 2024(2), 1-12. https://doi.org/10.7172/2353-6845.jbfe.2024.2.1
First Page
1
Last Page
12
Page Count
12
Received Date
11.12.2024
Revised Date
08.04.2024
Accept Date
10.10.2024
Online Available Date
11.12.2024
DOI
10.7172/2353-6845.jbfe.2024.2.1
JEL Code
G14; G10; L83; Z20; G12
Publisher
University of Warsaw