Odds and Ends: Horse racing and the business of sports betting – IV
by Prof. C. A. Saliya (The fourth instalment in a five-part series on the business of gambling, legal and illegal) Here’s a puzzle worth thinking about. For well over a century, Sri Lankan law has treated a village card game as a criminal offence, punishable by fine or imprisonment. In that same period, it has […]
Sri Lanka has regulated gambling for over a century, with village card games considered illegal and horse racing betting treated as a legitimate and taxable business. This disparity stems from the colonial era, where horse racing was a pastime for the wealthy British class, while village card games were deemed undesirable. The economic dynamics of horse racing betting are crucial, as bookmakers guarantee profit by pricing races below true odds, creating an artificial 10% advantage known as the "overround" or "vig."
This margin ensures profitability for the bookmaker, regardless of the race outcome. Additionally, bettors as a group tend to overestimate the chances of favorites winning and underestimate the chances of longshots, a phenomenon known as the "favourite-longshot bias." While professional handicapping can improve a bettor's chances of picking a winner, it cannot overcome the bookmaker's built-in advantage.
Furthermore, virtual meetings in betting, where outcomes are determined by a random number generator without actual horses or trainers, blur the line between genuine gambling and mere chance games.
Written by urgent.news from The Island Sri Lanka's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
