Betting (In)Efficiency after Football Coaching Replacements in Brazil

Abstract

This study analyzes how the sports betting market responds to changes of head coaches in Brazilian football using data from 11 seasons (2010-2020), including 4,180 official league games and 379 within-season coaching replacements. We examine the return on investment (ROI) for bets to win and bets to lose for three betting strategies: when head coaches joined their teams (1) after a dismissal, (2) following a resignation, and (3) when transition coaches worked between effective replacements. The regression results show significant positive effects on ROI for bets to win for games 5, 7, and 8 following a dismissal, as well as for games 4-6 following a resignation. Betting on games 3 and 5 (after a dismissal) and games 2 and 4 (after a resignation) has a significant negative effect on ROI for bets to lose. Collectively, the findings indicate some inefficiencies of the betting market that could be exploited by bettors.

Keywords

bookmaker coach turnover managerial change soccer South America

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