Submission Type

Presentation

Session Title

Session 2-1-D: Horses, Sports, and Games

Location

Caesars Palace, Las Vegas, Nevada

Start Date

29-5-2019 9:00 AM

End Date

29-5-2019 10:25 AM

Disciplines

Finance and Financial Management | Sports Studies | Supreme Court of the United States

Abstract

A landmark decision (Murphy v. NCAA) by the Supreme Court of the United States (SCOTUS) in 2018 ruled the federal government could not prohibit states from allowing sports wagering. While the implications of this decision are far reaching at both an industry and societal level, our study assesses the market response to information available throughout the various phases leading up to this decision by SCOTUS. The timeline of events preceding the SCOTUS decision is tracked, and stock performances of relevant, publicly traded firms are analyzed across three inflection points. Findings suggest the market failed to adequately acknowledge key events indicating the likelihood of the eventual decision by SCOTUS, instead only responding once its formal ruling was released on the final decision date. These findings raise questions about the efficiency of markets reacting to available information and the potential for investors to profit in similar future situations.

Keywords

Sports Gambling, Sports Betting, Supreme Court, Market Efficiency

Author Bio

Dr. Kevin Krieger is an Associate Professor of Finance at the University of West Florida. His research focuses in the areas of finance and sports market efficiency.

Dr. Justin Davis is an Associate Professor of Strategic Management at the University of West Florida. His research focuses in the areas of entrepreneurship, the efficiency of sports markets, and general areas of strategic management.

Funding Sources

No funding source.

Competing Interests

No competing interests.

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May 29th, 9:00 AM May 29th, 10:25 AM

Analyzing the Efficiency of Response to News Regarding Legalization of Sports Wagering

Caesars Palace, Las Vegas, Nevada

A landmark decision (Murphy v. NCAA) by the Supreme Court of the United States (SCOTUS) in 2018 ruled the federal government could not prohibit states from allowing sports wagering. While the implications of this decision are far reaching at both an industry and societal level, our study assesses the market response to information available throughout the various phases leading up to this decision by SCOTUS. The timeline of events preceding the SCOTUS decision is tracked, and stock performances of relevant, publicly traded firms are analyzed across three inflection points. Findings suggest the market failed to adequately acknowledge key events indicating the likelihood of the eventual decision by SCOTUS, instead only responding once its formal ruling was released on the final decision date. These findings raise questions about the efficiency of markets reacting to available information and the potential for investors to profit in similar future situations.