Placing Lay Bets On Betfair

One of the prime aspects of the rise of Betfair as a resource for betting on horse racing (and other events), was the opportunity to ‘act like a bookmaker’ and lay horses. Nothing about Betfair caught the imagination as much as this facility. Everyone could become a bookmaker, and we all know that bookmakers make lots of money; therefore we would all make money if we used Betfair.

Despite the numerous new breed of tipsters who would be able to tell everyone which horses were going to lose, only 2% of Betfair accounts are run in profit. Something is clearly wrong, and we have to understand precisely what is amiss if we are to have any chance of fulfilling the Betfair dream.

Before we can examine the reality of laying horses, we need to get one or two ‘facts’ in place. I use the word ‘facts’ loosely, because some of them are open to interpretation, but in the main they form a good starting point for discussion – and from discussion comes understanding.

Fact number one. The relative chance that any horse has in any given race is directly linked to its Starting Price (SP). Statistics and history (in this case the two are indistinguishable) show us that 1/1 money shots win more races than 2/1 chances, which, in turn, are far more successful than 10/1 outsiders. Perhaps surprisingly, the SP of a horse could be directly translatable to a winning percentage in an even market. If one looks at the returns, say for horses starting at 3/1 , their winning percentage is just under 23%, while their chance of winning (according to the SP) would be 25%.

The difference between the actual and statistical probability is due to two factors. One is the competitiveness of the race in which they took part, which skews the figures slightly. That is, a 3/1 chance that is favorite with the 2nd favorite at 5/1, will have a marginally increased chance in excess of 22.6%, than a 3/1 chance that is up against an odds-on favorite and a 6/4 second favorite. The more important factor is the SPs are not calculated from within an even market. They are taken from a market that has the bookmakers over round built into it.

If we take both of these factors out of the equation, then we can state with a degree of certainty that a 3/1 shot has a 25% chance of success (or a 75% chance of failure). Nothing could seem simpler, yet there is one factor that has to be taken into consideration; the environment from which the statistic have been extracted. This is where we come to the heart of the problem.

The statistics used are taken from the returned SP as calculated from the on-course bookmakers and the large betting shops. This bears no relationship to the prices available on Betfair. Betfair is keen to promote the fact that the prices available are ‘better’ than those obtainable from bookmakers. This is the case, but they are only ‘better’ if you are backing horses; they are ‘worse’ if you are laying.

We have demonstrated that a horse returned at an SP of 3/1 had a 75% chance of losing. Therefore laying horses that start at 3/1 would show a break-even situation. However, the prices available on Betfair are ‘better’ than SP, therefore anyone laying a 3/1 SP horse would be laying at odds above 3/1 (4.0 on the exchanges). This turns a break-even situation into a loss situation, as the losing percentage remains the same statistically.

Even at the relative low price of 3/1 there is a significant difference between the SP and the odds available on Betfair. As we consider longer-priced horses the difference becomes more marked. If we consider horses that start with an SP of 9/1 – statistically they would show a losing percentage of 90%. Yet horses returned at 9/1 are commonly traded on the exchanges at 15/1 and above.

At those odds for every 100 £10 lay bets you would return £900 and lose £1,500, yet statistically at SP you are looking at a break-even situation. The golden rule here is never to trust any system for laying that assumes the SP as being a price available on Betfair. It just won’t happen, and the margins between success and failure are so small as to make even a minor discrepancy completely ruinous to the layer.

Which leads onto another factor regarding laying that is too often overlooked. The psychological impact of the losing run, and how you can manage the betting bank in a laying situation. When laying longer priced horses the winning runs will be long (by winning runs I mean winning bets – which equates to losing horses). However, a losing run of only three will seriously impact any betting bank.

Ignoring the discrepancy in prices between SP and Betfair, a losing run of three on 9/1 shots will require 27 winning bets to recover. As a matter of side interest, probability theory shows us there is a statistical probability of three consecutive 9/1 winners happening once every three weeks.

When backing horses there are methods of maximizing winnings and minimizing losses by use of what is commonly termed a ‘staking plan’ (although I prefer to think of it as structured money management). Staking plans for laying horses are notoriously complex (and many I have seen are downright dangerous). That is not to say they don’t or can’t exist, only that the average punter could find themselves in hot water.

Consider the following sequence using selections at 4/1 with an aim to make £10 on each race selected: • Bet 1 – Lay £10 and the horse wins at 4/1 – Total Loss = £40 • Bet 2 – Lay £60 (to recover losses and make the expected profit on the two bets) and the horse wins at 4/1 – Loss on this bet = £240 and Total Loss = £280 • Bet 3 – Lay £310 (to recover losses and make the expected profit on the three bets) and the horse wins at 4/1 – Loss on this bet = £1,240 and Total Loss = £1,520 • Bet 4 – Lay £1,560 (to recover losses and make the expected profit on the four bets) and the horse loses – Return on this bet = £1,560 and we have a Total Profit of £40 In 4 bets our stake has gone from £10 to £1,560 – not a situation many people would find comfortable. And that is discounting the fact that our original bank would have had to have been £3,080 to cover the three loser and have the stake for the fourth bet.

Just take a moment to consider what we have really done on our fourth bet. We have staked £1,560 to win £40 – which equates to a bet at odds of 39/1 ON.

Laying horses for profit might not be impossible, in fact I know it isn’t, but it has to be accepted that Betfair does not give everyone the facility to become a bookmaker. What it does provide is an opportunity, and as with any form of betting only those armed with all the facts and with the right mental attitude will be successful. Psychologically, laying horses is far more onerous than one might believe – to see two days winnings wiped out in two races is damaging to say the least.

Betting the Horses

Using the information from the form or other sources is the basis for most betters to choose which horse merits a bet. It could be a hunch because you like the jockey and the horse’s name. A substantially better reason is does the race set up for the horse or not. This means if the race is loaded with speed, maybe a horse that likes to come from off the pace will do well when the front-runners tire.

Another consideration is the postposition of your selection. A horse posted way out side in the starting gate may be affected and it could influence how the horse will finish. Jockeys can be a factor in how the race is run and a better jockey seem to get more out of horse than another.

This myriad of nuances makes handicapping a difficult study and it takes a while to get good at it. There are several good books on handicapping available. If you happen to know a good handicapper ask them if they have any recommendations. If not read the reviews of readers on any book purchase site.

Here is a suggestion for playing trifectas at the races. If you can get a ten horse race down to five horses that you feel will have a chance to be in the money, this idea has merit. This idea is especially good if the horses you like are price horses. There are several ways to play this trifecta bet. You can play a $60 ticket with all five horses in the win, place and show slots. Each horse you eliminate from the win hole reduces the total price substantially. A three five five would only cost $36. A single in the win hole with all five in the second and third Holes would cost $12

Another wager strategy is what is called Dutch betting. This is the play of two or more horses to win at the same time. The odds have to be favorable for this idea to have legs. It is very good if you hand two 4 to one shots with an 8 to one shot. If any one of them wins you will book a profit. You could do the same thing with a 5 to two shot and a 3 to one shot. Pure favorites are hard to play in a Dutch betting strategy.

There are numerous betting strategies and a player is wise to find one they like.  

Spread Betting on Horse Racing

Spread betting on horses involves work. There are numerous factors and key things that need to be measured before allowing for looking at what to back. Keep firm to money management rules, unlike traditional betting; it’s not difficult to get over excited about fast winnings :) Welcome to our bookie section and check out our bookmaker selections & happy punting!

Betfair Casino, Zero Lounge

Players can choose from Zero Roulette, Zero Baccarat, Zero Jacks or Better, and Zero Blackjack. If you can't find the game you're looking for in the Zero Lounge, don't worry, you're sure to find a regular version back in the Main Lounge. We're big fans of this novel concept and give kudos to Betfair for taking such an approach and distinguishing their operation from all of the others there these days.

In terms of software, no download is required here as games are easily played in pop-up browser windows so all you really need to get started is a Betfair account which you may already have if you've used any of their other services(if you're looking to practice and play for free first, you don't even need the account!).