Southampton's chance of getting kicked out of the playoffs / Spygate

[Euler]

We have an interesting scenario now where we've got the odds up for Southampton v Hull, but also the odds on Southampton, Middlesbrough and Hull being promoted.

What’s interesting here is the difference between the outright promotion market and the actual playoff final market.

The match odds for the final imply roughly:

Southampton: 70%
Hull: 30%

That comes from taking the win odds and redistributing the draw probability across the two teams.

But the promotion market is pricing Southampton at around 54%.

So there’s a massive gap between the two markets.

The obvious explanation is that the market is pricing in the possibility that Southampton could still be removed from the final or stripped of promotion because of the ongoing cheating allegations.

If you compare the two markets directly, the implied probability of Southampton being removed comes out somewhere between about 15% and 23%, depending on exactly how you model the replacement process.

The conservative interpretation is around 15%, which is about 6.6 in decimal odds.

So effectively the market appears to be saying:

“Southampton are strong favourites on the pitch… but there is still a meaningful off-field risk attached to them.”

Quite unusual to see a regulatory or disciplinary risk show up this clearly in two related betting markets.