Market Efficiency and the Arena Football League: A Note
With final scores like 99-68 and 80-74, can the market for wagers on Arena Football League games operate with the same efficiency generally associated with the more established betting markets? The question extends the argument by Pankoff (1968) that football point spreads are analogous to security prices and that profitable betting rules would create doubt about the efficiency of any competitive marketplace. Pankoff reasoned that bettors were no less numerous, knowledgeable or profit-maximizing than investors and that superior returns should be just as elusive to the former as they are to the latter. However, arena football's short point spread history and the developing nature of its market may serve to disqualify the sport from Pankoff's analogy and create profit opportunities not unlike those often attributed to neglected, or underfollowed, stocks (Arbel and Strebel, 1983).