With Tadgh Hegarty , International Journal of Forecasting, 2025.
There is a huge global betting market on soccer matches, most popular in Asia, where people don’t bet on the result but on an adjusted version where the weaker team is given an additional “handicap”. This paper shows that the pricing of these odds – even on the same matches and among the same bookmakers – is different from the traditional home/away/draw (or 1X2) market.
We explain how Asian handicap betting works and show to use the odds to work out the implied probability that a bet will win. We show that, unlike the 1X2 market, there is no favourite-longshot bias. The average return on bets does not depend on the probability that the bet wins. In contrast, on the same sample of games, bets on the 1X2 market show a substantial bias of this sort with high-odds bets having substantially lower average returns than bets on favourites.
Key research finding: Pricing in betting markets depends on how competitive the market is. Even looking at the same bookmakers quoting on the same games, prices can differ depending on the structure of the bets and the customer base.
Practical advice: Asian Handicap bets on soccer have lower margins and their prices are better indicators of the underlying probabilities than the odds from typical 1X2 bets.
The paper: