Sports Betting Industry Proponents of Essay

With respect to the second criteria, it has also been found that betting exchanges deliver more accurate odds than bookmakers. This is to be expected, since betting exchanges are based on open market principles while bookmakers control their markets. The bookmaker's spread will negate any advantage the bookmaker will have in setting odds vis-a-vis the market. Indeed, the market's ability to set better odds than bookmakers has to do with removing the traditional information asymmetry that exists in the bookmaking industry.

The only point on which bookmakers may offer superior consumer welfare is with respect to liquidity. The concept applies to bookmakers as well, though, in that spreads are greater for events that receive fewer bets. In addition, the market is likely to remedy the liquidity problem and Metcalf's Law in the long-run, meaning that over the long-run betting exchanges are expected to deliver superior consumer welfare outcomes compared with bookmakers.Works Cited:

Koning, R. & Van Velzen, B. (2008). Betting exchanges: The future of sports betting? Retrieved May 1, 2011 from http://www.thefreelibrary.com/Betting+exchanges:+the+future+of+sports+betting%3F-a0200185604

Smith, M. (no date). Consumer welfare and policy relating to online gambling. Economics & International Business Subject Group. In possession of the author.

Smith, M.; Paton, D. & Williams, L. (2006). Market efficiency in person-to-person betting. Economica. (2006). In possession of the author.

Smith, M.; Paton, D. & Williams, L. (2008). Do bookmakers possess superior skills to bettors in predicting outcomes? Journal of Economic Behaviour and Organisation. In possession of the author.

Smith, M. & Vaughan, L. (2008). Betting exchanges: A technological revolution in sports betting. Handbook of Sports and Lottery Markets. Elsevier.

Wray, E. & Kelly, T. (2005). Are betting exchanges good for sport? The….....