Are punters sophisticated?
Niall O'Connor April 3rd, 2007
A leading Irish bookmaker (BetChronicle), with close associations to the Dublin-based, betting exchange, Betdaq, has put up a best price offer of 2.75 Tiger Woods to win the US masters (to 130 sterling), against an available price to lay on Betfair of 2.58.
A sure fire way of backing a winner, but is the price being arbitraged away by thousands of small online punters wishing to lock in a profit?
The evidence suggests not…. Reasons: Perhaps a combination of ignorance and inertia; or might it simply be that the amount of money to be won in performing the arbitrage is an irrelevant sum to the big players, whilst the majority of small punters do not have the funds necessary to perfom the arbitrage.
Either way, you can back Woods at 2.75 with BetChronicle and currently lay him on Betfair at 2.58.
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At 17.19 GMT it is noted that the price differential has been arbitraged away, with Woods now trading at 2.76 on Betfair.