The Market for English Premier League Odds

Download Full Paper Here

Betting on the result of a soccer match is a rapidly growing market, and online real-time odds exists. Market odds for all possible score outcomes as well as outright win, lose and draw are available in real time. The goal of our study is to show how a parsimonious two-parameter model can flexibly model the evolution of the market odds matrix of final scores. We provide a non-linear objective function to fit our Skellam model to instantaneous market odds matrix. We then define the implied volatility of an EPL game and use this as a diagnostic to show how the market’s expectation changes over the course of a game. A key feature of our analysis is to use the real-time odds to re-calibrate the expected scoring rates instantaneously as events evolve in the game. This allows us to assess how market expectations change according to exogenous events such as corner kicks, goals, and red cards. A plot of the implied volatility provides a diagnostic tool to show how the market reacts to event information. In particular, we study the evolution of the odds implied final score prediction over the course of the game. Our dynamic Skellam model fits the scoring data well in a calibration study of 1520 EPL games from the 2012 – 2016 seasons. One advantage of viewing market odds through the lens of a probability model is the ability to obtain more accurate estimates of winning probabilities.

Back to Videos