ABSTRACT
Economists have long been interested in the economics of betting markets as exemplified by the excellent survey articles by Sauer (1998) and Vaughan Williams (1999). This is perhaps not surprising given that in many countries the majority of persons gamble often with large stakes. 1 For instance 68% of the population of the UK had participated in some form of gambling activity within the past year in UK (48% excluding people who had only gambled on the National Lottery Draw) (see British Gambling Prevalence Survey, 2007). Also, the amount of money spent on gambling activities is increasing in many countries. For example, the amount retained by gambling operators in UK after the payment of winnings, but before the deduction of the costs of the operation was £9.8 billion, a 36% increase in nominal terms since 1999 (see British Gambling Prevalence Survey, 2007).
