[The HG]

If sports gambling over the net does become legal in the US, will the markets make a substantial jump in efficiency as a result? Assuming that the entire market would pretty quickly essentially become one big extremely low-juice exchange, by what magnitude would the efficiency of the market change?

[Arnold]

So what if it's not legal. Nothing stops you from betting. Same as nothing stops you from downloading software, movies, music, etc.

[picoman]

Originally Posted by Arnold

So what if it's not legal. Nothing stops you from betting. Same as nothing stops you from downloading software, movies, music, etc.

when it is legal, liquidity will increase many many folds. more liquidity means smaller spreads and more efficient market.

[picoman]

Originally Posted by The HG

If sports gambling over the net does become legal in the US, will the markets make a substantial jump in efficiency as a result? Assuming that the entire market would pretty quickly essentially become one big extremely low-juice exchange, by what magnitude would the efficiency of the market change?

it also depends on how many banks will allow their credit cards to be used for gambling.

[durito]

It depends on how it's regulated.

It was basically legal 16 months ago and there hasn't been a huge change.

[The HG]

Originally Posted by durito

It was basically legal 16 months ago.

Not so much in people's minds though. It was always thought of as something not fully legit, and certainly not legit enough for most people to consider sinking a whole lot of money into (relative to other areas of investment of course).

But if the govt comes out and legitimizes it, where it can be something you can freely and confidently pursue with security, I'm wondering if a whole new influx of interest will come from places it never came before in the history of the industry.

I still would have a hard time believing my eyes if the govt ever actually passed legislation in the "sports gambling is ok" direction, but if they did, I think the entire industry would change in a fundamental way pretty quickly, I'm just wondering exactly how and how much.

[Arilou]

I think there's a limit to how efficient sports markets will ever be, due to a combination of asymmetrical information problems and the public having systemic bias all over the place.

Liquidity would go way up, of course, and you'd likely be able to get down huge amounts of money on American sports at Pinnacle and other books, and Matchbook would get vastly more liquid. The vig, however, probably wouldn't go down aside from Matchbook being slightly thinner much the same way it didn't increase when the laws changed.

Also note that action can make markets in sports LESS efficient - for example, the NFL playoffs. The Super Bowl, shall we say, has issues.

[picoman]

hard to solve the asymetric information problem though. that is why sportsgambling will never become mainstream

[WSBetter]

Can you elaborate on the asymmetric information issue. Are you just talking about there not being a full disclosure procedure/requirement for as much information betters are desiring?

[coldhardfacts]

Sports betting is legal in Vegas, with dozens of competing outlets. Yet, I see no signs there of market efficiencies creating a better environment for players.

Of course, that may be because there are no longer any "Little Caesers" and the casinos view their sports books as "loss leaders" rather than profit centers, in that the sports books take up valuable space that could otherwise be put to more profitable use.

[noyb]

Originally Posted by The HG

If sports gambling over the net does become legal in the US, will the markets make a substantial jump in efficiency as a result? Assuming that the entire market would pretty quickly essentially become one big extremely low-juice exchange, by what magnitude would the efficiency of the market change?

to see what it would be like, just go to betfair.com about 10 minutes before the start of any english premiership soccer-game. the part of the world that likes to bet soccer, for the most part is allowed to and you really see that in the offering: typically you have hundreds of thousands on offer, very tight bid-ask spread, in the hours before kick off it really is very much like any stock exchange.