The efficient market hypothesis applied to greyhound racing

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Gaine, Bill
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University College Cork
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Despite a growing amount of literature applying the Efficient Market Hypothesis (EMH) in sports betting markets (Angelini, Angelis, Singleton, 2019, Brechot and Flepp, 2020). Many sports, like horse racing, could be subject to corruption through shirking (Goodwin and Corral, 1996). Greyhound racing provides a unique sporting environment when testing betting market efficiency, where shirking is almost impossible. This study applies EMH to anecdotal evidence from the greyhound racing industry. A longstanding anecdotal belief in greyhound racing is that a dog placed in Trap Four of the six possible traps is the coffin trap. This belief implies that being in Trap Four reduces the chance of success in any given contest. This study used multiple iterations of a Poisson regression to perform three distinctive groups of regressions. This first included Pre-Race variables; the second included the determinants of finishing position: within-race bends, and finally, the third factored in the determinants of finishing position: trap dummies. The “coffin trap” theory holds weight; Trap Four significantly predicted race outcomes across each regression. Trap Three was also significant across most regressions, showing that it could also be considered a coffin trap. Interestingly, when either Trap Three or Trap Four were removed, either trap came out with an advantage over the other traps, indicating that avoiding crowding was crucial in determining race outcome. Greyhound racing provides a unique area to further investigate the EMH in sports betting markets without corruption through shirking. This study could be furthered in the future by incorporating the jurisdictions of Ireland and Australia and diverse types of races from different distances, hurdles or handicap races.
Market hypothes , Greyhound racing
Gaine, B. 2022. The efficient market hypothesis applied to greyhound racing. MRes Thesis, University College Cork.