Betting Landscape

The wagering landscape has changed in Australia remarkably over our 15 years in the industry. This change has been accelerating considerably over the last year or two in particular. To survive in this game you have to be able to identify these changes and adapt accordingly. In our opinion, there has never been a better time to be a small to medium sized punter than right now.

The marketplace is vastly different these days compared to 15 years ago. Back then there was no such thing as pre-post betting. Markets only went up for the next race after the running of the previous race. There were no huge corporate bookmakers dominating the market nationwide, but rather individuals operating in their own jurisdictions. The TAB was just a tote and fixed odds betting was still a way off for them and the Betfair revolution was still five years away.

Looking at markets recently, some very interesting trends have become evident concerning the wildly fluctuating prices available throughout the day’s betting.

To illustrate, we looked at four consecutive Sydney metro meetings, and recorded the best price available from 9am (when the industry minimum bet limits kick in) through to the jump (off). Using these prices, the markets look like this:

RaceSat 11-Nov Wed 15-Nov Sat 18-Nov Wed 22-Nov 
Field sizeMarket percentageField sizeMarket percentageField sizeMarket percentageField sizeMarket percentage

These are only from six major bookies: Sportsbet, TAB, Bet365, UBET, CrownBet and Centrebet. Of course, there are many more, smaller bookies offering similar prices to compete in a saturated marketplace. There’s no real difference between Wednesdays and Saturdays, and no discernible pattern by field size.

It’s all post 9am in a state with minimum bet limits, so theoretically you can get set for $20-30k across 10 bookmakers.

As you can see, the numbers are crazy. The average across the 32 races is 91.7%!

In the old days, people on track would say the bookies were giving away money if Top Fluc was under 100%. Mo Conlon would actually stop betting on a race once the percentage got too low.

Here, we’re nudging 90%.

Read our education piece – Arbitrage Betting

Then when you add the numbers from Betfair things get even better for punters, as they usually do! The above figures drop down by about 1% per race when you add in Betfair SP, but what is truly remarkable is the value available to smaller punters on Betfair right now. Because the market and Betfair tend to mirror each other (especially over the last 15 min of betting), along with Betfair’s peer to peer nature that results in more competitive prices available at most times, leads to this remarkable graph:

This graph shows a summary of 8 weeks’ worth of NSW and Vic races on Betfair and the MEDIAN price bet for both $5 and $50 units. Here you can see $50 punters getting 85% at just the midpoint of money traded. $5 punters are looking at 79%. Those securing better than median odds are truly getting a bonanza by betting with Betfair.

How is it happening?

The market at the start of betting (9am) until jump time often varies wildly. The fluctuations are enormous.

Now obviously capturing the best price on a horse is a skill in itself. And I’m not suggesting you back all runners in each race for an over-round (although we do think that’s possible for someone with skill, diligence and discipline).

But what the numbers show is that if you do the form or have a set of prices you trust, the edge that’s always been in the house’s favour is now in favour of the smart punter.

So you can now back more runners in a race (savers, part savers, etc). For example, take a field of 10: during the course of betting six or more of your runners could become overlays because of these wild fluctuations. You could be on the six runners to varying degrees. Some may even be small losers, but by eliminating the runners you don’t like, you can be betting a very good % about the six runners you do like.

If that doesn’t suit your style and you only intend backing one or two runners in a race, then it also means that with patience and nous, securing inflated odds at some point in betting is almost assured.

Why is it happening?

This is the culmination of the corporatization – or ‘European-isation’ – of our racing marketplace.

In their wisdom, corporate bookies have decided that it’s cheaper to ‘play heads’ rather than hire big teams of form analysts and pricing experts. By this we mean they basically just put up any old set of prices.

Usually, it’s just one or two blokes doing their best with limited resources and huge time constraints to put up the first set of prices. They then let the ‘heads’ shape the market from there.

The smarter punters bet, and they firm that runner and ease the rest. The smarter the punter, the more exaggerated the move.

The key is that individual firms don’t have many form students and therefore any firm opinion of what the correct price should be for each runner. They all just use a scrape to set their prices off each others. That’s why most of the prices online are within one or two rolls of each other at all times after 9am.

They can do this because the most important figure for a bookie isn’t the percentage of the best fluctuation bet, but rather the average percentage laid across the book.

They aren’t concerned if the top price laid is incorrect. As long as the average percentage laid is over 105%, they’re happy.

To illustrate with an example: a horse is backed by a very smart punter early at 3.0. He has $1,000 on it with ten bookmakers, so $10,000 on to win $20,000. The bookies then wind it into 2.6.

A few people who miss the price chime in and it becomes 2.4. The prices bounce back around off each other, and all of a sudden the horse is 2.3.

But it’s okay for them because a large percentage of their hold is in the last five minutes of betting, and an overwhelming percentage of that is recreational money.

Say they end up holding $200,000 on the race. $70,000 may well be on that favourite.

If they lay even $5,000 at the 3.0, the other $65,000 can be laid at 2.3. For the bookie, that’s laying $70,000 at $2.35.

This also presents an angle for the shrewd Betfair layer or trader. If you are able to be patient and lay after the firm and ‘catch them right’, then your lay book will end up with a good % in your favour. The exaggerated moves back and forth throughout betting presents enormous opportunities for traders and layers.

So what are they playing at here?

Effectively, instead of paying for their own form students, they’re paying punters to set their markets.

In this example, they’ve paid the punter $538 in implied value in order to lay the horse at the correct price. They bet him $1,000 at 3.0 to lose $2,000. If they bet the punter to lose $2,000 at the eventual $2.3 price, it would be $1,538 on to collect $3,538. So the early price has cost them a potential $538 in implied value.

As long as the prices on the bookies board are somewhat correct at the 5-minute mark of betting, with the 15% or so over-round in their favour at this stage, they just need to hold enough recreational money to justify it and they’ll be ahead.

What does it mean for us?

If you trust the prices you have in the long-run and are ready to take the overlays during the course of betting, there’s absolutely never been a better time to be a small or medium-sized punter.

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