THE OXFORD HANDBOOK OF

THE ECONOMICS

OF

Edi ted by

LEIGHTON VAUGHAN WILLIAMS

and

DONALD S. SIEGEL

OXFORD UNIVERSITY PRESS CONTENTS

Contributors ix Introduction xiii

SECTION I

1. The Employment Impact of Gambimg in the U.S. 3 GARY ANDERS

2. The Economics of Casino Taxation 18 JOHN E. ANDERSON

3. The Elasticity of Casino Gambling 37 MARK W. NICHOLS AND MEHMET SERKAN TOSUN

4. The Economics of Asian Casino Gaming and Gambling 55 RICARDO CHI SEN SIU

5. How does Implementation of a Smoking Ban Affect Gaming? 87 JOHN C. NAVIN, TIMOTHY S. SULLIVAN, AND WARREN D. RICHARDS

6. Overview of the Economic and Social Impacts of Gambling in the United States 108 DOUGLAS M. WALKER

SECTION II

7. The Economics of Online Sports Betting 131 GEORGE DIEMER AND RYAN M. RODENBERG

8. The Football Pools 147 DAVID FORREST AND LEVI PÄREZ

9• The Efficiency of Soccer Betting Markets 163 JOHN GODDARD Vi CONTENTS

10. The Efficiency of Pelota Betting Markets 172 LORETO LLORENTE, JOSEMARI AIZPURUA, AND JAVIER PUERTOLAS

11. The Lure of the Pitcher: How the Baseball Betting Market Is Influenced by Elite Starting Pitchers 194 RODNEY J. PAUL, ANDREW P. WEINBACH, AND BRAD R. HUMPHREYS

12. Information Efficiency in High-Frequency Betting Markets 210 J. JAMES READE AND JOHN GODDARD

SECTION III HORSE RACE BETTING

13. On the Long-Run Sustainability of Tote Betting Markets 235 DAVID EDELMAN

14. The Economics of Racetrack-Casino () Gambling 241 RICHARD THALHEIMER

15. The Modern Racing Landscape and the Racetrack Wagering Market: Components of Demand, Subsidies, and Efficiency 256 RAMON P. DEGENNARO AND ANN B. GILLETTE

16. What Explains the Existence of an Exchange Overround? 276 DAVID MARGINSON

17. Insider Trading in Betting Markets 298 ADI SCHNYTZER

18. Pricing Decisions and Insider Trading in Fixed-Odds Horse Betting Markets 316 ADI SCHNYTZER, VASILIKI MAKROPOULOU, AND MARTIEN LAMERS

SECTION IV BETTING STRATEGY

19. Betting on Simultaneous Events and Accumulator Gambles 341 ANDREW GRANT

20. A Primer on the Mathematics of Gambling 370 ROBERT C. HANNUM

21. The Science and Economics of 387 ROBERT C. HANNUM CONTENTS VÜ

22. The Kelly Criterion with Games of Chance 4°2 LEONARD C. MACLEAN AND WILLIAM T. ZIEMBA

23. Exploiting Expert Analysis? Evidence from Event Studies in an Information-Rich Market Environment 428 MICHAEL A. SMITH

SECTION V MOTIVATION, BEHAVIOR AND DECISION-MAKING IN BETTING MARKETS

24. Betting Motivation and Behavior 451 ALISTAIR BRUCE

25. Motivation in Betting Markets: Speculation, Calculus, or Fun? 474 LES COLEMAN

26. Evidence of Biased Decision-Making in Betting Markets 487 DAVID MCDONALD, MING-CHIEN SUNG, AND JOHNNIE JOHNSON

27. Behavioral Finance and Point Spread Wagering Markets 518 GREG DURHAM

SECTION VI PREDICTION MARKETS AND POLITICAL BETTING

28. A Simple Automated Market Maker for Prediction Markets 543 DAVID JOHNSTONE

29. The Long History of Political Betting Markets: An International Perspective 560 PAUL W. RHODE AND KOLEMAN STRUMPF

SECTION VII AND GAMBLING MACHINES

30. The Efficiency of Markets 589 DAVID FORREST AND O. DAVID GULLEY

31. The National Lottery 6x1 JOHN LEPPER AND STEPHEN CREIGH-TYTE VÜi CONTENTS

32. The Benefits and Costs of Gambling 637 SCOTT FARROW AND CHAVA CARTER

33. The Economics of Lotteries: A Survey of the Literature 670 KENT GROTE AND VICTOR A. MATHESON

34. The Taxation of Gambling Machines: A Theoretical Perspective 692 LEIGHTON VAUGHAN WILLIAMS AND DAVID PATON

Name Index 701

General Index 703