Bookmakers' mispricing of the disappeared home advantage in the German Bundesliga after the COVID-19 break

Abstract: The outbreak of COVID-19 in March 2020 led to a shutdown of economic activities in Europe. This included the sports sector, since public gatherings were prohibited. The German Bundesliga was among the first sport leagues realising a restart without spectators. Several recent studies suggest that the home advantage of teams was eroded for the remaining matches. Our paper analyses the reaction by bookmakers to the disappearance of such home advantage. We show that bookmakers had problems to adjust the betting odds in accordance to the disappeared home advantage, opening opportunities for profitable betting strategies.