Sports Betting as a New Asset Class - Current Market Organization and Options for Development
Posted: 21 May 2008
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Sports Betting as a New Asset Class - Current Market Organization and Options for Development
Sports Betting as a New Asset Class - Current Market Organization and Options for Development
Abstract
New asset classes are originally distributed via Over the Counter channels; mostly negotiated, traded and settled on a bilateral and ad-hoc basis. Subsequently, the demand for organised market services grows alongside trading volumes, number of market participants and distribution reach. This paper focuses on sports betting as a new asset class and uses the analogies between the development of traditional and new asset classes as a framework to extend market organisation. The first section motivates sports betting as new asset class based on its economic relevance. In section two, the European market is described by product design, distribution platforms and regulatory environment. In section three we discuss the dimensions of market model, technology and regulation as prerequisites to develop organised markets. Against this background, we compare the value chain in financial and sports betting markets to identify and describe three options for development: a regulated market environment, an inter-bookmaker platform, and central counterparty clearing services.
Keywords: Sports Betting
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