To relate the theory to a real-world betting market, an empirical analysis of over 5000 matches from the National Football League is conducted. Upper and lower bounds on wagering accuracy are derived, and the conditions required for statistical estimators to attain the upper bound are provided. Knowledge of the median outcome is shown to be a sufficient condition for optimal prediction in a given match, but additional quantiles are necessary to optimally select the subset of matches to wager on (i.e., those in which one of the outcomes yields a positive expected profit). Here the key decisions facing the sports bettor are cast in terms of the probability distribution of the outcome variable and the sportsbook’s proposition. Although considerable effort has been previously devoted to the analysis of sportsbook odds setting and public betting trends, the principles governing optimal wagering have received less focus. The recent legalization of sports wagering in many regions of North America has renewed attention on the practice of sports betting.
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