An Empirical Examination of the Parimutuel Sports Lottery Market Versus the Bookmaker Market (Symposium‪)‬

1. Introduction Market mechanisms under which sports betting takes place can be categorized into two major types: a bookmaker system and a parimutuel market system. In a bookmaker-based system, the bookmaker posts odds and charges a commission (also called "vigorish" or "juice") for placing a bet. In this type of market, bettors (or "punters") are promised a fixed payoff according to the odds that are posted at the time they make their bets. In the parimutuel betting system, there are no bookmakers, and the payout from a specific outcome is inversely related to the aggregate amount wagered on that outcome relative to the aggregate amount bet across all outcomes. Therefore, the payout will not be determined until all bets are submitted. In this study, we use a unique data set in the parimutuel-type Korean sports lottery market and examine the joint efficiency of the parimutuel sports lottery market and the bookmaker market.