Insider trading is well documented in equity markets, where participants trade based on knowledge of company announcements before they are made public. The sports betting market is no exception to this practice, with suspicious betting occurring before the Melbourne Storm salary cap breach was announced. This has forced bookmakers into the uncomfortable situation of deciding which bets to uphold and which to refund for the NRL 2010 wooden spoon market.
Yesterday morning Sportingbet was forced to shut down its wooden spoon market after taking a string of bets on Melbourne at 250-1 odds. At the time, Melbourne Storm were the title favourites for the 2010 season.
In the afternoon in was announced that the Melbourne Storm would be stripped of all competition points for the 2010 season to date, and forgo any more points for the rest of the season. This of course guarantees Melbourne the wooden spoon.
This leaves betting agencies with the headache of sorting out how to manage refunds and payouts for their wooden spoon markets. It is speculated that some agencies could lose hundreds of thousands of dollars in the process.
I have always thought it was worth a punt to bet on the top clubs for the wooden spoon, because as the Bulldogs have previously shown, you never know when an announcement of a salary cap breach is around the corner. I would be gutted if I had made a bet weeks ago only to have it refunded now. In hindsight you would have either lost money or received a refund if you were correct. For fairness sake, if I were a bookmaker I would honour all Melbourne Storm bets prior to yesterday, and refund the rest.