Longshot bias is the observed tendency for unlikely outcomes to be priced higher than their true chance, and likely outcomes lower.
Last reviewed 3 November 2025 · Educational, not advice
Longshot bias, often called the favourite longshot bias, is a pattern observed across many betting and prediction markets in which unlikely outcomes tend to be priced a little too high relative to how often they actually occur, while likely outcomes are priced a little too low. In odds terms, the longshots are too expensive and the favourites are slightly cheap, on average and over many cases.
The effect has been documented for decades in horse racing and other fixed odds markets, where the average return on betting the longest odds is markedly worse than on betting favourites. In prediction markets researchers describe it as the midpoint of the price tending to overstate the true probability of low chance outcomes. The pattern is empirical and well studied, though its size varies by market.
Several explanations have been proposed and they are not mutually exclusive. Some people may simply enjoy the small chance of a large payout and pay a premium for it, much like buying a lottery ticket. Others may misjudge small probabilities, overweighting rare events. In bookmaker markets the pricing response to informed bettors can also contribute. There is no single agreed cause.
For a market participant the practical reading is cautious, not a recipe. The bias is an average tendency measured across many outcomes, not a rule about any single market, and it can be small, absent, or reversed in a particular case. It does not tell you that a given longshot is mispriced now, and acting on it still means crossing the spread and paying fees.
The honest use of the idea is as a reminder to check your own thinking on rare events. If you find yourself drawn to a long odds contract by the size of the possible payout rather than by a sober estimate of its chance, longshot bias is exactly the trap being described. Comparing the price to a careful base rate is a better guide than the lure of the payout.
Suppose a field of contracts covers many possible winners, and the longest priced ones trade around 3 cents each. If outcomes of that kind have historically come in less often than 3 in 100, then on average those longshots are overpriced, and steadily buying them would lose over many events. A single one could still win, but the average is what the bias describes.
Illustrative only. Numbers are examples, not a quote or a prediction, and exclude fees.
Longshot bias is an average tendency, not a signal about any single market, and it can be absent or reversed in a given case. It is a reason for caution about long odds, not a strategy, and the risk of loss is unchanged. Stake only what you can afford to lose, never to chase a loss, and never on borrowed money. If it stops feeling like a free choice, step back. In the United States you can call or text the helpline on 1-800-GAMBLER or visit ncpgambling.org.
It is the observed tendency for unlikely outcomes to be priced higher than their true chance and likely outcomes lower. The pattern, also called the favourite longshot bias, appears across many betting and prediction markets.
There is no single agreed cause. Proposed reasons include a taste for small chances of large payouts, the misjudging of small probabilities, and how bookmakers respond to informed bettors. The explanations are not mutually exclusive.
No. It is an average measured across many outcomes, not a rule about any single market, and it can be small, absent, or reversed in a given case. Acting on it still means crossing the spread and paying fees, with the risk of loss intact.
Researchers describe it as the midpoint of the price tending to overstate the true probability of low chance outcomes. The exact size of the effect varies by market and is not guaranteed in any one case.
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