An Examination of In-play Sports Betting Using One-Day

Cricket Matches

Steve Easton and Katherine Uylangco

School of Business and Management, University of Newcastle, Callaghan NSW
2308, Australia
Steve.Easton@newcastle.edu.au
Katherine.Uylangco@studentmail.newcastle.edu.au

ABSTRACT

There is a wide literature on sports betting markets, a literature that examines the informational

efficiency of these markets and uses them as laboratories to test for possible impacts of

psychological factors on financial markets. The innovation of this study is the examination of

price behaviour in an in-play betting market namely that for one-day cricket. Cricket provides

an ideal construct in which to examine in-play market behaviour, as it is a sport where outcomes

can be calibrated as good news or bad news on a play-by-play basis. The results from an

examination of over 8000 balls corresponding to over 8000 news events shows that the in-play

betting market is one in which news is impounded rapidly into betting odds. There is also

evidence that odds have a level of predictive ability with respect to outcomes from balls before

they are bowled. Further, there is evidence of a drift in odds subsequent to the outcome of balls

being known.

Key Words: Sports Betting, In-Play Betting, Market Microstructure

Acknowledgments: We thank Rob Brown, Phil Gray, Andrew Leigh, Sean Pinder and Justin

Wolfers for helpful comments and discussions.

 An Examination of In-play Sports Betting Using One-Day
Cricket Matches

1. Introduction

There is a wide literature on sports betting markets, a literature that examines the informational

efficiency of these markets and uses them as laboratories to test for possible impacts of

psychological factors on financial markets.1 A common feature of all of these studies is that they

exploit the fact that in sports betting markets the range of possible asset payoffs are known in

advance and that the distribution of those payoffs is known soon after each bet is placed.

The innovation of this study is to examine price behaviour in an in-play betting market namely

that for one-day cricket. All existing sports betting studies are limited to examining bets placed

before matches or races begin, therefore limiting the analyses to relatively unsophisticated ones

where the probabilities of outcomes are not able to be reassessed during the event. This limits the

commonality of such studies with those of financial markets, where probabilities are continuously

reassessed over time.

Cricket provides an ideal construct in which to examine in-play market behaviour, as it is a sport

where outcomes can be calibrated on a play-by-play basis: as extremely good news (batsman

scores more than four runs), very good news (batsman scores four runs), good news (batsman

scores two or three runs), satisfactory news (batsman scores a run), mildly bad news (batsman

fails to score a run) and extremely bad news (batsman loses his wicket). This calibration provides

the opportunity to examine the efficiency with which the market impounds information as to the

revised expectations of the result of the match that the outcome of each ball provides.2

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The paper is organised as follows. Section 2 provides a discussion of the methodology and data

collection and the results are presented in Section 3. Section 4 provides a summary.

2. Methodology and Data

2.1 METHODOLOGY

Event-study methodology is used to examine the efficiency of an in-play betting market. In this

instance, a unit of time is defined as the period from just prior to a ball being bowled to just prior

to the subsequent ball being bowled. Ball zero is defined as the ball just bowled, ball one is

defined as the subsequent ball, while ball minus one is defined as the ball prior to the one just

bowled.

While it is not possible to detail all of the rules of the game of one-day cricket, the essential

features are as follows.3 The winning team is the team that scores the most runs in an innings

consisting of fifty overs, where typically each over is made up of six balls.4 Each team has ten

wickets, the innings will cease if all wickets are taken before the end of the fifty overs. As a result

of a ball being bowled it is possible that a wicket will be lost and / or that any number of runs,

generally between zero and six, may be scored.5

2.2 EXPECTED OUTCOMES

There are four major factors that affect the extent to which the outcome of a ball bowled in a

cricket match changes expectations as to the outcome of the match. These factors are; firstly, the

outcome of the ball, including whether a wicket is taken and the number of runs scored; second,

the expected outcome from the ball; third, the number of balls remaining in the match; and fourth,

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with respect to the second innings of each match, the required run rate, where the required run

rate is equal to the average number of runs required per ball for the remainder of the innings in

order to win the match.

Historical data may be used to support this a priori reasoning. Historical data from 100 one-day

international matches played from April 2004 to January 2006 (the period immediately preceding

that for the matches analysed in this study), were collected from the Statistical Archive section of

the cricinfo.com website. Only games involving national teams are included in the data set.

Games involving A teams, provincial teams and teams from non-test-playing nations are not

included.

Table 1 Historical Averages from April 2004 to January 2006

Ove rs 1-10 Ove rs 11-20 Ove rs 21-30 Ove rs 31-40 Ove rs 41-50 Tota l
Full Ma tch
Ave ra ge Num be r of Runs Score d 46 45 45 49 71 229
Ave ra ge Num be r of W icke ts Ta ke n 1.4 1.3 1.2 1.2 2.6 6.8

Innings One
Ave ra ge Num be r of Runs Score d 46 44 43 49 76 248
Ave ra ge Num be r of W icke ts Ta ke n 1.4 1.2 1.1 1.1 2.7 7.3

Innings Tw o
Ave ra ge Num be r of Runs Score d 47 46 47 49 63 210
Ave ra ge Num be r of W icke ts Ta ke n 1.3 1.4 1.2 1.4 2.4 6.3

Source: cricinfo.com

As shown in Table 1, an average of 229 runs was scored per innings. This suggests that for the

batting side, losing a wicket is the worst outcome and scoring zero runs is in virtually all possible

instances bad news while scoring one run is on average good news. For the bowling team, the

logic is the opposite of that for the batting team. A wicket is the best outcome, zero runs is in

virtually all possible instances good news, while one run is on average bad news, with the more

runs scored being increasingly worse.

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The ratio of the average number of runs scored (229) to the average number of wickets lost (6.8)

is 34. This statistic suggests that the magnitude of the negative impact from losing a wicket is

expected to be of the order of between 30 and 40 times the magnitude of the positive impact from

scoring a run.

It is also expected a priori that for the batting team, scoring two runs from a ball should on

average result in a change in the expectations as to the outcome of the match that is more than

twice the magnitude of the change that should result from scoring one run from a ball. This is

because scoring two runs from the one ball leaves an extra ball to score additional runs. Similarly,

three runs is more than three times the good news of one run, four runs more than four times as

good as one run, six runs more than six times as good as one run, and four runs more than twice

as good as two runs. In summary, the positive response from scoring runs should increase at an

increasing rate as the number of runs scored increases.

As also shown in Table 1, the run rate is higher in the final ten overs of each innings, as is the rate

at which wickets are lost. The average number of runs increases from between 45 and 49 runs per

ten overs during the first forty overs, to 71 runs during the final ten overs. Similarly, the number

of wickets lost increases from between 1.2 and 1.4 wickets per ten overs during the first forty

overs, to 2.6 wickets during the final ten overs. Therefore, for each innings, the expectation of

scoring zero runs is lower in the final ten overs, while the expectation of scoring four or more

runs is higher, as is the expectation of losing a wicket. Therefore, the negative response to scoring

zero runs should increase in magnitude during the final ten overs, the positive response to scoring

four or more runs should fall in magnitude during the final ten overs, and the negative response to

losing a wicket should fall in magnitude during the final ten overs.

Third, as the match proceeds, the number of balls remaining falls.6 Therefore, the relative

importance of the outcome of the next ball bowled increases. Another way of considering this

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factor is that of the remaining uncertainty, the percentage of uncertainty resolved by the next ball

increases as the match proceeds. Therefore, the negative response to scoring zero runs by the

batting team should increase in magnitude as the match proceeds with the response being more

negative in the second innings compared with the same part of the first innings. Also, the

response to losing a wicket should be more negative in the second innings compared with the

same part of the first innings. And the response to scoring four or more runs should be more

positive in the second innings compared with the same part of the first innings.

The second and third factors detailed above are not independent. For example, the second factor

suggests that the negative impact of losing a wicket should decrease in the final section of each

innings, while the third factor suggests that the negative impact should increase.

In the first innings, the negative impact for the batting team from losing a wicket should decrease

as the innings progresses. At the end of the first innings, the loss of a wicket is more likely to

occur, which should decrease the negative impact of that event. However, in the second innings

the negative impact of losing a wicket may be expected to increase. Even though a wicket is more

expected as the innings progresses, the relative importance of each ball may be expected to have a

greater impact.

Similarly, in the first innings, the positive impact for the batting team from scoring a high number

of runs from a ball should decrease as the innings progresses. However, in the second innings, the

positive impact for the batting team following a high number of runs being scored should

increase. Even though more runs are expected from a ball as the innings progresses, the relative

importance of each ball may be expected to have more influence as the match is almost complete.

Fourth, in the second innings, the response to the outcome from a ball may be expected to be

determined by the change in the required run rate, where the required run rate is equal to the

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average number of runs required per ball for the remainder of the innings in order to win the

match. A reduction in the required run rate may be expected in most cases to result in an

increased expectation of the batting team winning the match. This factor might be expected to

have additional explanatory power over and above the number of runs scored from a ball. For

example, if one run is scored from a ball but the required run rate is greater than one run per ball,

then the probability of the batting team winning the match may be expected to have decreased.

2.3 DATA

Ball-by-ball bid and ask prices for the two teams in each match were collected in real time from

the on-line betting exchange Betfair (see www.betfair.com). Betfair is an on-line betting

exchange that matches bets. It allows clients to offer odds or to accept odds offered by other

clients.7 Betfair takes a commission from the winning party but it does not set the odds; these are

determined by the market. Bid and ask quotations are provided on Betfairs website allowing bets

to be accepted at any time throughout the match. These bid and ask prices for each team were

recorded after each ball was bowled.

The data were collected by simultaneously watching a live television broadcast and listing to live

radio coverage.8 The ball-by-ball scores were cross checked against data obtained from

www.cricinfo.com.

Data were collected for each of the fifteen matches of the Australia, South Africa and Sri Lanka

series held in the Australian summer of 2005 2006. The data set comprises 8828 balls. Betting

during each match was on average $A9,018,165, with the minimum (maximum) amount bet

during a match being $A4,476,905 ($A13,953,889).

Page 8 of 23
To calculate payoffs from betting odds, it is necessary to first reduce the bid and ask prices for

each of the teams to a unique value. This value is derived by firstly selecting the best odds

available for backing the first team / selling the second team and the best odds available for

selling the first team / backing the second team. The midpoint of these two odds is used as the

single odd from which to derive the payoff.

Having calculated the odds, the payoff for a team is calculated as 1/Dt1 - 1/Dt0, where Dt0 is the

current odds for a team, and Dt1 is the odds for a team after one ball. The payoff from betting for

one team is always the negative of the payoff from betting for the other team. For example, a ball

that results in the odds for one team changing from 1.1 to 1.2, a payoff of -0.076, will

simultaneously result in the odds for the other team changing from 11 to 6, a payoff of 0.076.

Therefore results will only be provided for the batting team.9

3. Results

Table 2 provides an examination of the payoffs over the six balls prior to the ball in which the

outcome is measured, the ball in which the outcome is measured, and the six balls following the

ball in which the outcome is measured.10

The average (median) payoff from betting on the batting team for the ball in which a wicket is

taken is -$0.055 (-$0.042). Scoring zero runs is, as expected, bad news for the batting team with

an average (median) payoff of -$0.001 ($0.000). Scoring one runs is, also as expected, on average

good news for the batting team with an average payoff of $0.001, although the median payoff is

zero. The average and median payoffs also increase as the number of runs scored increases.

Further, these payoffs increase at an increasing rate. The average payoff from scoring two runs

from a ball ($0.004) is more than twice the average payoff from scoring one run ($0.001).

Page 9 of 23
Similarly, the average payoff from scoring three runs from a ball ($0.004) is more than three

times the average payoff from scoring one run, while the average payoff from scoring four runs

($0.009) is more than four times the average payoff from scoring one run and more than twice the

average payoff from scoring two runs. As expected, the positive payoff from scoring runs

increases at an increasing rate as the number of runs scored increases.

As expected, the average payoff from losing a wicket is more negative in the second innings

(-$0.065) than in the first innings (-$0.046). Also, as expected, the average payoff from scoring

zero runs is more negative in the second innings (-$0.002) than in the first innings (-$0.001). The

same result applies to scoring one, two, three, four or more than four runs. For example, the

average payoff from scoring two runs is more positive in the second innings ($0.006) than in the

first innings ($0.003) and the average payoff from scoring four runs from a ball is more positive

in the second innings ($0.016) than in the first innings ($0.009). Similarly, the average payoff

from scoring more than four runs from a ball in the second innings is $0.018 compared with

$0.015 in the first innings. The magnitude of the average negative payoff from losing a wicket is

-$0.055, 55 times the magnitude of the average positive payoff from scoring a run ($0.001).

The multiple t-test was used to test H0 (that the average payoffs for the different outcomes from

the ball, namely a wicket, zero runs, one run, two runs, three runs, four runs or more than four

runs, are equal) against H1 (the average payoffs for the different outcomes are not equal). The

Kruskal-Wallis test is the non-parametric equivalent to the multiple t-test. The Jonckheere test is

also used to test H0 (the average payoffs for the different outcomes were equal) against H1 (that 1

< 2 < 3 < 4 < 5 < 6 < 7, where i, i = 1,,6 denotes the average payoff for a wicket, zero

runs, one run, two runs, three runs, four runs or more than four runs for the batting team). These

statistics all show that at the time of the event, the average payoffs for the different events are not

equal. The Jonckheere test shows that the average payoff for a wicket is less than the average

Page 10 of 23
payoff for scoring zero runs which in turn is less than the average payoff for scoring more than

one run. These results are all significant at the 0.01 level.

An examination of the payoffs over the six balls prior to the ball in which the outcome is

measured suggests evidence of an association between these payoffs and the outcome from the

ball. The multiple t-test, Kruskal-Wallis test and the Jonckheere test for both the combined

innings and the second innings are all significant at the 0.01 level, with the parametric test also

being significant for the first innings at the 0.05 level. For the combined innings, the average

(median) payoff over the six balls prior to a ball in which zero runs were scored is -$0.004

($0.000), compared with an average (median) payoff over the six balls prior to a ball in which

one run was scored of $0.001 ($0.001). This result is consistent with bettors having some ability

to predict the outcome of the ball in which the outcome is being measured and incorporating that

prediction into the odds that are provided.

An examination of the payoffs over the six balls following the ball in which the outcome is

measured also suggests evidence of an association between these payoffs and the outcome from

the ball. The multiple t-test, Kruskal-Wallis test and the Jonckheere test for both the combined

innings and the second innings are all significant at the 0.01, with the non-parametric tests also

being significant for the first innings at the 0.01 level. For the combined innings, the average

(median) payoff over the six balls following a ball in which zero runs were scored is -$0.003

($0.000), compared with an average (median) payoff over the six balls following a ball in which

one run was scored of $0.000 ($0.001). This result suggests evidence of under-reaction to the

outcome of balls bowled and is consistent with evidence of post-event drift in equity markets

found by Bernard and Thomas (1989) and Ball, Kothari and Watts (1993), amongst others.

Page 11 of 23
Table 2 Payoffs across outcomes from balls
Cumulative Payoffs from ball -6 to ball -1 Payoff from ball 0 Cumulative Payoff from ball +1 to ball +6
Number of Average Median Standard T test Wilcoxon Number of Average Median Standard T test Wilcoxon Number of Average Median Standard T test Wilcoxon
observations payoff deviation probability probability observations payoff deviation probability probability observations payoff deviation probability probability
Full Match

Event:
Wicket 218 -$0.001 $0.002 0.035 31% 1% 216 -$0.055 -$0.042 0.053 0% 0% 197 -$0.004 $0.000 0.038 5% 44%
0 Runs 4055 -$0.004 $0.000 0.044 0% 0% 4190 -$0.001 $0.000 0.016 0% 0% 4126 -$0.003 $0.000 0.038 0% 0%
1 Run 2984 $0.001 $0.001 0.037 1% 0% 3020 $0.001 $0.000 0.012 0% 0% 2956 $0.000 $0.001 0.041 45% 0%
2 Runs 623 $0.001 $0.001 0.042 33% 0% 624 $0.004 $0.002 0.014 0% 0% 604 $0.002 $0.002 0.042 14% 0%
3 Runs 113 $0.002 $0.001 0.027 21% 6% 114 $0.007 $0.004 0.012 0% 0% 113 $0.000 $0.003 0.034 47% 2%
4 Runs 563 $0.006 $0.002 0.037 0% 0% 569 $0.012 $0.009 0.016 0% 0% 548 $0.004 $0.002 0.047 2% 0%
>4 Runs 95 $0.004 $0.000 0.025 6% 8% 95 $0.017 $0.010 0.026 0% 0% 94 $0.010 $0.007 0.052 3% 0%

Test Test Test Test Test Test

Statistic probability Statistic probability Statistic probability
Multiple Tests:
T Test 9.2 0% 482.9 0% 4.9 0%
Kruskal Wallis 25.1 0% 1,704.8 0% 47.7 0%
Jonckheere 4.0 0% 37.5 0% 6.7 0%

Number of Average Median Standard T test Wilcoxon Number of Average Median Standard T test Wilcoxon Number of Average Median Standard T test Wilcoxon
observations payoff deviation probability probability observations payoff deviation probability probability observations payoff deviation probability probability

Innings One

Event:
Wicket 110 $0.006 $0.007 0.022 0% 0% 112 -$0.046 -$0.040 0.041 0% 0% 97 $0.003 $0.003 0.030 20% 11%
0 Runs 1973 -$0.000 $0.003 0.034 34% 0% 2040 -$0.001 $0.000 0.020 2% 0% 2015 -$0.000 $0.002 0.031 39% 0%
1 Run 1617 $0.001 $0.003 0.025 11% 0% 1642 $0.001 $0.000 0.013 0% 0% 1615 $0.001 $0.003 0.026 4% 0%
2 Runs 340 $0.002 $0.003 0.024 5% 0% 340 $0.003 $0.002 0.010 0% 0% 325 $0.003 $0.004 0.028 2% 0%
3 Runs 67 $0.003 $0.002 0.019 14% 6% 67 $0.006 $0.005 0.012 0% 0% 66 $0.005 $0.004 0.023 4% 1%
4 Runs 305 $0.005 $0.004 0.025 0% 0% 310 $0.009 $0.009 0.011 0% 0% 293 $0.003 $0.004 0.033 8% 0%
>4 Runs 54 $0.003 $0.002 0.021 18% 8% 54 $0.015 $0.013 0.021 0% 0% 54 $0.009 $0.008 0.024 0% 0%

Test Test Test Test Test Test

Statistic probability Statistic probability Statistic probability
Multiple Tests:
T Test 2.4 2% 161.7 0% 2.0 6%
Kruskal Wallis 12.0 6% 877.7 0% 20.3 0%
Jonckheere 1.2 24% 25.9 0% 3.9 0%

Number of Average Median Standard T test Wilcoxon Number of Average Median Standard T test Wilcoxon Number of Average Median Standard T test Wilcoxon
observations payoff deviation probability probability observations payoff deviation probability probability observations payoff deviation probability probability

Innings Two

Event:
Wicket 108 -$0.008 $0.000 0.044 3% 85% 104 -$0.065 -$0.045 0.062 0% 0% 100 -$0.011 -$0.001 0.044 1% 1%
0 Runs 2082 -$0.007 $0.000 0.051 0% 59% 2150 -$0.002 $0.000 0.010 0% 0% 2111 -$0.005 $0.000 0.044 0% 89%
1 Run 1367 $0.002 $0.000 0.046 3% 0% 1378 $0.001 $0.000 0.012 0% 0% 1341 -$0.001 $0.000 0.054 22% 0%
2 Runs 283 -$0.001 $0.000 0.056 38% 13% 284 $0.006 $0.001 0.017 0% 0% 279 $0.000 $0.000 0.054 45% 0%
3 Runs 46 $0.001 $0.000 0.036 40% 51% 47 $0.008 $0.002 0.011 0% 0% 47 -$0.006 -$0.000 0.044 16% 78%
4 Runs 258 $0.007 $0.000 0.048 1% 0% 259 $0.016 $0.009 0.020 0% 0% 255 $0.006 $0.000 0.059 5% 1%
>4 Runs 41 $0.006 $0.000 0.030 10% 42% 41 $0.018 $0.008 0.031 0% 0% 40 $0.011 $0.001 0.075 19% 7%

Test Test Test Test Test Test

Statistic probability Statistic probability Statistic probability
Multiple Tests:
T Test 7.9 0% 364.1 0% 3.5 0%
Kruskal Wallis 22.5 0% 824.3 0% 33.9 0%
Jonckheere 4.3 0% 26.8 0% 5.3 0%

Page 12 of 23
Figure 1 Cumulative Payoffs (Combined Innings)

0.04

0.02

0
t-6 t-5 t-4 t-3 t-2 t-1 t t+1 t+2 t+3 t+4 t+5 t+6

-0.02
Payoff ($)

-0.04

-0.06

-0.08

-0.1
Time

Wicket 0 Runs 1 Run 2 Runs 3 Runs 4 Runs >4 Runs

The results presented in Tables 1 are also presented in Figures 1, 2 and 3. These figures provide

cumulative payoffs from the six balls prior to the ball in which the outcome is measured to six

balls following the ball in which the outcome is measured.

As shown in these figures, most of the change in payoffs that occurs prior to the ball in which the

outcome is measured occurs at the time of the previous ball. For the combined innings, the

multiple t-test, and the non-parametric tests are all significant at the 1% level for this ball but not

for the ball two balls prior to the one in which the outcome is measured. The statistical

significance for the ball prior to the ball in which the outcome is measured is predominantly

driven by the results in the second innings as the multiple t-test and the non-parametric tests are

not significant for the first innings results.

Page 13 of 23
The figures also show that the post-event drift predominantly occurs in the three balls following

the event. The non-parametric tests are significant at the 5% level for each of the three balls

following the event for the first, second and combined innings. The multiple t-test is also

significant at the 5% level for the second and third balls after the event in the first innings and the

combined innings. The multiple t-tests and the non-parametric tests are not significant for any

balls greater than three balls after the event.

Figure 2 Cumulative Payoffs (Innings One)

0.04

0.02

0
t-6 t-5 t-4 t-3 t-2 t-1 t t+1 t+2 t+3 t+4 t+5 t+6

-0.02
Payoff ($)

-0.04

-0.06

-0.08

-0.1
Time

Wicket 0 Runs 1 Run 2 Runs 3 Runs 4 Runs >4 Runs

Page 14 of 23
Figure 3 Cumulative Payoffs (Innings Two)

0.04

0.02

0
t-6 t-5 t-4 t-3 t-2 t-1 t t+1 t+2 t+3 t+4 t+5 t+6

-0.02
Payoff ($)

-0.04

-0.06

-0.08

-0.1
Time

Wicket 0 Runs 1 Run 2 Runs 3 Runs 4 Runs >4 Runs

Table 3 provides the results of regression analyses where change in the required run rate, whether

a wicket is taken, and the number of runs scored are used as explanatory variables in explaining

payoffs. The impact of a wicket being taking is measured by use of a dummy variable set to one

(zero) if a wicket is taken (not taken). The results are again shown for payoffs over the six balls

prior to the ball in which the outcome is measured, the ball in which the outcome is measured,

and the six balls following the ball in which the outcome is measured.11

As shown in Table 3, change in the required run rate, whether a wicket is taken, and the number

of runs scored, are all significant in explaining payoffs for the ball in which the outcome is

measured. With respect to the taking of a wicket and the number of runs scored, the results are

consistent with those reported in Tables 2. The coefficients on each of the independent variables

Page 15 of 23
are significant at all traditional levels of statistical significance, and in total explain 50 per cent of

the variation in payoffs.

The analysis of the payoffs over the six balls prior to the ball in which the outcome is measured is

also consistent with the results reported in Tables 2, again suggesting evidence of an association

between these payoffs and the number of runs scored from a ball. The payoffs are positively

associated with a decrease in the required run rate and an increase in the number of runs scored.

The wicket dummy variable is not significant for explaining the payoffs prior to the ball in which

the outcome is measured. These results are again consistent with bettors having some partial

ability to predict the outcome of the ball in which the outcome is being measured and

incorporating that prediction into the odds that are provided. The independent variables explained

9 per cent of the variation of the payoffs over the six balls prior to ball in which the outcome is

measured is explained.

The analysis of the payoffs over the six balls following the ball in which the outcome is measured

is also generally consistent with the results reported in Tables 2, with the payoffs being positively

associated with an increase in the number of runs scored. However, the wicket dummy variable is

not significant, nor is change in the required run rate and only 1 per cent of the variation of the

payoffs over the six balls prior to ball in which the outcome is measured is explained.

Page 16 of 23
Table 3 Multivariate Analysis of Payoffs

Cumulative Payoff from ball -6 to ball -1 Payoff from ball 0 Cumulative Payoff from ball +1 to ball +6
Coefficient Test Probability Coefficient Test Probability Coefficient Test statistic Probability
statistic statistic

Independent Variables:
Intercept -0.005 -4.05 0% -0.003 -7.59 0% -0.006 -4.52 0%
Change in the Required Run Rate -0.443 -14.92 0% -0.010 -2.79 1% -0.011 -0.89 38%
Wicket -0.005 -0.71 48% -0.099 -45.72 0% -0.012 -1.45 15%
Number of Runs Scored 0.005 5.05 0% 0.006 21.65 0% 0.004 4.41 0%

R Squared 9% 50% 1%
Number of Observations 2,682 2,752 2,668

The results reported in the table are from the regression: payoff = 0 + 1 x RRR + 2 x W + 3 x R, where RRR is the change in the required run rate as a result of the ball in which the outcome is
measured, W is a dummy variable set to one (zero) if a wicket is taken (not taken), and R is the number of runs scored from the ball.

Page 17 of 23
As discussed in Section 2, the expected outcomes from each ball will change as each innings

progresses and will also differ between the first and second innings. The analysis of the payoffs

as each innings progresses is presented in Table 4.

As shown in Table 4, the average (median) payoff for the batting team losing a wicket in the last

ten overs is -$0.031 (-$0.021). This is a less negative payoff than for losing a wicket in the first

forty overs with average (median) payoffs of -$0.070 (-$0.067), -$0.088 (-$0.059), -$0.065

(-$0.054) and -$0.050 (-$0.034) in each ten over period respectively. These results are consistent

with a greater expectation of a wicket being lost from any ball in the final ten overs compared

with the first forty overs.

Table 4 also demonstrates that the average payoff from not scoring any runs from a ball is more

negative for the batting team in the final ten overs (-$0.003) compared with in any of the other ten

over periods. As expected, the negative response to scoring zero runs is especially pronounced in

the final ten overs of the second innings (-$0.004).

The results in Table 4 also show that in general, the payoffs are more pronounced in the second

innings than in the first. The average payoff as a result of losing a wicket in the final 10 overs of

the second innings (-$0.059) is more negative compared with the same part of the first innings

(-$0.022). The response to scoring zero runs in the final 10 overs of the second innings (-$0.004)

is also more negative compared with the same part of the first innings (-$0.002). At the other

extreme, the average payoff from scoring four runs (more than four runs) in the last 10 overs of

the second innings $0.020 ($0.022) is more positive compared with the same part of the first

innings $0.008 ($0.009). This demonstrates that as the match progresses and the number of balls

remaining falls, the relative importance of the outcome of the next ball bowled increases.

Page 18 of 23
Table 4 Payoffs across outcomes from balls
Overs 1-10 Overs 11-20 Overs 21-30 Overs 31-40 Overs 41-50
Number of Average payoff Median Number of Average payoff Median Number of Average payoff Median Number of Average payoff Median Number of Average payoff Median
observations observations observations observations observations
Combined Innings

Event
Wicket 37 -$0.070 -$0.067 31 -$0.088 -$0.059 28 -$0.065 -$0.054 55 -$0.050 -$0.034 65 -$0.031 -$0.021
0 Runs 1193 -$0.002 $0.000 1008 -$0.001 $0.000 816 -$0.001 $0.000 690 -$0.001 $0.000 483 -$0.003 $0.000
1 Run 363 $0.003 $0.000 468 $0.001 $0.000 747 $0.002 $0.000 815 $0.001 $0.000 627 $0.000 $0.000
2 Runs 94 $0.005 $0.003 114 $0.004 $0.002 112 $0.005 $0.003 140 $0.004 $0.002 164 $0.004 $0.000
3 Runs 30 $0.008 $0.006 25 $0.006 $0.002 31 $0.006 $0.003 10 $0.013 $0.006 18 $0.006 $0.003
4 Runs 142 $0.012 $0.010 167 $0.013 $0.011 72 $0.010 $0.007 70 $0.013 $0.007 118 $0.012 $0.006
>4 Runs 13 $0.019 $0.018 20 $0.027 $0.016 16 $0.013 $0.012 18 $0.011 $0.007 28 $0.014 $0.004

Expected Average
Number of Runs 46 45 45 49 71

Expected Average
Number of Wickets 1.4 1.3 1.2 1.2 2.6

Number of Average payoff Median Number of Average payoff Median Number of Average payoff Median Number of Average payoff Median Number of Average payoff Median
observations observations observations observations observations
Innings One

Event
Wicket 19 -$0.077 -$0.067 12 -$0.085 -$0.048 12 -$0.054 -$0.050 21 -$0.049 -$0.046 48 -$0.022 -$0.018
0 Runs 588 -$0.002 $0.000 483 -$0.001 $0.000 409 -$0.000 $0.000 321 -$0.000 $0.000 239 -$0.002 $0.000
1 Run 188 $0.004 $0.000 264 $0.001 $0.000 372 $0.001 $0.000 448 $0.001 $0.000 370 $0.001 $0.000
2 Runs 50 $0.006 $0.004 58 $0.003 $0.002 43 $0.003 $0.003 74 $0.002 $0.002 115 $0.002 $0.001
3 Runs 18 $0.009 $0.006 16 $0.004 $0.004 20 $0.006 $0.004 2 $0.016 $0.016 11 $0.004 $0.004
4 Runs 73 $0.011 $0.009 83 $0.011 $0.011 38 $0.008 $0.006 33 $0.008 $0.005 83 $0.008 $0.007
>4 Runs 8 $0.022 $0.023 11 $0.027 $0.017 8 $0.019 $0.016 10 $0.006 $0.004 17 $0.009 $0.007

Expected Average
Number of Runs 46 44 43 49 76

Expected Average
Number of Wickets 1.4 1.2 1.1 1.1 2.7

Number of Average payoff Median Number of Average payoff Median Number of Average payoff Median Number of Average payoff Median Number of Average payoff Median
observations observations observations observations observations
Innings Two

Event
Wicket 18 -$0.063 -$0.066 19 -$0.090 -$0.081 16 -$0.073 -$0.069 34 -$0.050 -$0.019 17 -$0.059 -$0.042
0 Runs 605 -$0.001 $0.000 525 -$0.001 -$0.000 407 -$0.002 $0.000 369 -$0.001 $0.000 244 -$0.004 $0.000
1 Run 175 $0.002 $0.000 204 $0.000 $0.000 375 $0.002 $0.000 367 $0.001 $0.000 257 $0.000 $0.000
2 Runs 44 $0.004 $0.003 56 $0.005 $0.002 69 $0.006 $0.001 66 $0.006 $0.001 49 $0.010 $0.000
3 Runs 12 $0.007 $0.005 9 $0.009 $0.001 11 $0.007 $0.001 8 $0.012 $0.001 7 $0.007 $0.001
4 Runs 69 $0.013 $0.011 84 $0.016 $0.014 34 $0.012 $0.007 37 $0.018 $0.008 35 $0.020 $0.002
>4 Runs 5 $0.015 $0.011 9 $0.028 $0.015 8 $0.007 $0.001 8 $0.017 $0.009 11 $0.022 $0.000

Expected Average
Number of Runs 47 46 47 49 63

Expected Average
Number of Wickets 1.3 1.4 1.2 1.4 2.4

The expected average number of runs and wickets are based on historical averages as shown in Table 1

Page 19 of 23
4. Summary

The innovation of this study is the examination of price behaviour in an in-play betting market

namely that for one-day cricket. Cricket provides an ideal construct in which to examine in-play

market behaviour, as it is a sport where outcomes can be calibrated as good news or bad news on

a play-by-play basis. Consistent with the results from studies of financial markets, the results

from an examination of over 8000 balls corresponding to over 8000 news events shows that the

in-play betting market is one in which news is impounded rapidly into betting odds. There is also

evidence that odds have a level of predictive ability with respect to outcomes from balls before

they are bowled. Further, there is evidence of a drift in odds subsequent to the outcome of balls

being known.

Page 20 of 23
References

Asch, P. & R. Quandt, Efficiency and Profitability in Exotic Bets [1987] Economica, 54(215)

at p289.

Ball, R., Kothari, S. & R. Watts, Economic Determinants of the Relationship between Earnings

Changes and Stock Returns [1983] Accounting Review, 68 at p622.

Bernard, V. & J. Thomas, Post-Earnings-Announcement Drift: Delayed Price Response or Risk

Premium? [1989] Journal of Accounting Research, 27 (Supplement) at p1.

Brown, W & R. Sauer, Fundamentals or Noise? Evidence from the Professional Basketball

Betting Market [1993] Journal of Finance, 48(4) at p1193.

Cain, M., Law, D. & D. Peel, The Favourite-Longshot Bias and Market Efficiency in UK

Football Betting [2000] Scottish Journal of Political Economy, 47(1) at p25.

Duckworth, F. & A. Lewis, A Fair Method for Resetting the Target in Interrupted One-Day

Cricket Matches [1998] Journal of the Operational Research Society, 49 at p220.

Engel, M, Wisden Cricketers Almanack [2006] John Wisden & Co Ltd, 143rd Edition.

Golec, J. & M. Tamarkin, The Degree of Inefficiency in the Football Betting Market [1991]

Journal of Financial Economics, 30(2) at p311.

Page 21 of 23
Gray, P. & S. Gray, Testing Market Efficiency: Evidence from the NFL Sports Betting Market

[1997] Journal of Finance, 52(4) at p1725.

Patell, J. & M. Wolfson, The Intraday Speed of Adjustment of Stock Prices to Earnings and

Dividend Announcements [1984] Journal of Financial Economics, 13 at p223.

Pope, P. & D. Peel, Information, Prices and Efficiency in a Fixed-Odds Betting Market [1989]

Economica, 56(223) at p323.

Sauer, R., Bajer V., Ferric S. & M. Marr, Hold Your Bets: Another Look at the Efficiency of the

Gambling Market for National Football League Games [1988] Journal of Political Economy,

96(1) at p206.

Smith, M., Paton, D., & L. Vaughan Williams, Market Efficiency in Person-to-Person Betting

[2006] Economica, 73(292) at p673.

Snowberg, E. & J. Wolfers, Understanding the Favorite-Longshot Bias: Risk Preferences versus

Misperceptions [2005] Research Paper, University of Pennsylvania.

Thaler, R. & W. Ziemba, Parimutuel Betting Markets: Racetracks and Lotteries [1988] Journal

of Economic Perspectives, 2(2) at p161.

Woodland, L. & B. Woodland, Market Efficiency and the Favourite-Longshot Bias: the Baseball

Betting Market [1994] Journal of Finance, 49 at p269.

Page 22 of 23
Zuber, R., Gandar, J. & Bowers, B., Beating the Spread: Testing the Efficiency of the Gambling

Market for National Football League Games [1985] Journal of Political Economy, 93(4) at

p800.

1
A far from complete list of studies includes Brown and Sauer (1993) for basketball, Asch and
Quandt (1987), Thaler and Ziemba (1988) and Snowberg and Wolfers (2005) for horse racing,
Zuber, Gandar and Bowers (1985), Sauer, Bajer, Ferric and Marr (1988), Golec and Tamarkin
(1991) and Gray and Gray (1997) for NFL Football, Woodland and Woodland (1994) for baseball
and Pope and Peel (1989) and Cain, Law and Peel (2000) for soccer.
2
The study is similar in design to that of Patell and Wolfson (1984) who examined the intraday
speed of adjustment of share prices to earnings and dividend announcements.
3
For a comprehensive coverage of the rules of cricket, see Engel (2006).
4
In the event of a tied match, all bets placed within the match-odds markets in Betfairs on-line
betting exchange are void. Data from Betfair are used in this study.
5
In some instances, runs are scored from the same ball from which a wicket is lost. For all
analysis in this paper, where a wicket is lost it is allocated to the wickets-lost category and is
excluded from other categories.
6
Under the rules of one-day cricket, the score required in the second innings and the number of
balls that are required to be bowled may be adjusted if the match is interrupted by rain under what
is known as the Duckworth-Lewis system (see Duckworth and Lewis (1998)). While the
expectations detailed above still pertain under that system, none of the matches for which the
betting market was examined were affected by rain.
7
Smith, Paton and Vaughan Williams (2006) report that the lower transaction costs of online
betting with Betfair compared with transaction costs from traditional betting have resulted in a
significant increase in market efficiency.
8
The data on a ball-by-ball basis were collected immediately prior to each ball being bowled, and
after an interval of 2 minutes when play was halted.
9
Payoffs rather than returns were used to examine the markets response to information because
unlike returns the payoff from betting for one team is always the negative of the payoff from
betting on the other team. We thank Justin Wolfers for suggesting this approach. Payoffs were not
calculated when odds were unavailable for backing one team / selling the other team.
10
The outcome is measured for 8828 balls. The number of balls examined using payoffs over the
six balls prior to the ball in which the outcome is measure is 8663 (or 8828 less 15 x 12 + 15)
balls. Similarly, the number of balls examined using payoffs over the six balls following the ball
in which the outcome is measured is 8648 (or 8828 less 15 x 12) balls.
11
The analysis is necessarily restricted to second innings as the required run rate is only known
for those innings. To prevent outliers having an impact on the results, payoffs are not calculated
when the odds are less than or equal to 1.01 for either team. This procedure resulted in a total of
2752 events. The number of balls examined using payoffs over the six balls prior to the ball in
which the outcome is measure is 2682 (or 2752 less 14 x 6 + 14) balls. Similarly, the number of
balls examined using payoffs over the six balls following the ball in which the outcome is
measured is 2668 (or 2752 less 14 x 6) balls.

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