Open Conference Systems, 50th Scientific meeting of the Italian Statistical Society

Font Size: 
Estimating the implied probabilities in the tennis betting market: A new normalization procedure
Vincenzo Candila, Antonio Scognamillo

Last modified: 2018-06-04


The prices offered by the fixed-odd bookmakers in the tennis betting market are biased because of the favourite-longshot phenomenon. How to derive unbiased implied probabilities underlying the published odds is the focus of this study. This paper proposes a new normalization procedure that yields unbiased probabilities, regardless of the presence of heavy underdogs. In-sample, the proposed normalization has a superior forecasting ability than the other methods. Moreover, it enables betting strategies which produce superior returns than those obtained from the Bradley-Terry type model.

Full Text: PDF