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Betting with Betfair

This article on Betfair Betting by Paul Segar and brought to you by Pureform covers one of the most popular horse racing websites: Betfair and looks at how it differs from other more traditional establishments.

10+ Major Betfair Betting Differences

 

Introduction
1. Market Percent
2. Betfair Commissions
3. Betfair Bookie or Punter Options
4. Betfair Mode of Market
5. Betfair Selection Assist
6. Betfair markets to simplify form study
7. Betfair for Re-Assessment
8. Trading with Betfair
9. Last Minute Decision Making
10. Betfair In-Running
11. Place Betting
12. A versus B
13. Other Novelty Wagers
Recommended Reading

Introduction

Betfair and betting exchanges are the newest and in some ways the most exciting way of gambling on horse racing, harness racing, greyhound racing and other sports. This article gives you a baker's dozen, that's right, 13 ways Betfair differs from more traditional gambling houses.

So what are the fundamental differences between a TAB, bookmaker and a Betfair market? The next few paragraphs outline these differences with the obvious ones considered first.

1. Market Percent

First off, the TAB or reasonable bookmaker market adds to somewhere around 115% to 120%. A good Betfair market will sum closer to parity, or 100% (the same applies for place markets, 360% or thereabouts for TAB/bookie, approaching 300% for an active Betfair place market). So, difference number one is tighter pricing which most people are fully aware. This percentage difference between the various markets can be a real bonus especially for longer priced runners. Markets and percentages will be revisited in another article.

2. Betfair Commissions

The second difference is Betfair takes its percentage or commission only from profit gained on an event, obviously after it has run. I haven’t visited England for some time but previously, the VAT or Value Added Tax when concerned with punting was either added to the initial wager, or paid on the winning amount. At that time the VAT was 10% and so most people paid the VAT, like with the Betfair commission, on the winning amount (if any). No point adding an extra 10% (or higher as it is today) onto the stake for an end result of losses. Betfair follows the same approach but only on the net profit on any particular race. So if you support one horse to win and lay another for the same amount and have a net zero result, then no commission will be paid.

Currently in Australia, the base take of over 6% is not far short of the old ‘don’t forget the10%’ rule.

3. Betfair Bookmaker or Punter Options

The third difference is the ability to wager for or against any particular runner or combination thereof. Again, most people that have used Betfair are already aware of this difference and this is of course one of the major benefits of using Betfair – you can either play punter, bookie or a combination of both. Versatility with a capital B (for Betfair).

4. Betfair Mode of Market

A forth and less publicized difference is the mode of market.

A TAB market consists of money already invested. TAB market prices are produced simply on the amounts wagered on each runner (minus the TAB commission). So in other words a historical market. A bookmaker will vary the prices somewhat based on their opinion, on course information, etc but for most runners will have final odds similar to the TAB with perhaps their opinion adding / subtracting to those price estimations. In most cases the prices approaching race start time are based on money already held to produce a ‘book’. This approach represents a traditional punting model.

The Betfair market or model is quite different. It is an instantaneous market – a ‘snapshot’ of the current situation. Nothing to do with money already wagered. In fact money already bet is totally irrelevant from a punting view. The market as shown is simply the figures at that current state of play (to use different sporting jargon).

Consider the following scenario highlighting another Betfair difference: (This article focuses on racing however a little tennis doesn’t hurt now and then).

Tenisu Sutaru (English name Tennis Star) is cruising to an easy win in the third set of a 3 set match against Toppy Spin-Lobb. The in-play odds for Tenisu are a firm $1.03 on the Betfair market screen with huge money represented on either side of the Bet/Lay margin . Everyone is watching the match with most punters certain of the event’s result. But as I often say in horse race after backing a roughie against the ‘unbeatable’ favourite, if horse racing was easy, everyone would win. But I digress. Back to the tennis.

Suddenly Tenisu goes down hard and appears to sprain her ankle, bad. Can’t finish the match is touted – by everyone, in the know. Now if the TAB or bookmakers were still offering odds, the odds would still show $1.03 and perhaps gradually ease. On Betfair, the price for Tenisu suddenly jumps from $1.03 to a massive $2.40 before drifting slowly back to $2. The players, and I don’t mean those on-court, are in a panic and their heads are spinning. Money is wagered at a frenetic pace as opinions vacillate around the new predicament.

Sure enough Tenisu recovers after some therapy and limps around the court to another win. But no longer at the skinny $1.03. The current ‘snapshot’ price includes the possibility of a relapse and would show a premium, perhaps right up to the last point.

Normal horse racing is a little different. A horse is scratched if injured before race start and so money back is the worse case scenario for a pre-race injury. Other rules apply if during the run a horse falls or is pulled up, loses its jockey, jumps the running rail or some other irregularity. Simply money lost. Again everyone knows this, especially when betting on jumps racing. So what’s the difference?

The difference is that quite often horses present badly in the mounting yard, some other information may come to light late or some other factor. A horse is running late for the race, totally flustered, throws its jockey in the mounting yard, needs an escort to the start and generally is in a foul mood. Odds could be offered about the horse missing the start and you could bet on the margin. The horse is a firm $4.50 TAB second favourite. The Betfair market prices its chance at an easing $8. The result? In most cases, the horse fails, often quite miserably. Yes its TAB price also eases but with the solid early backing it may only ease to $5 or $6. And many people will still continue to support the horse as the odds increase to a more juicy level, the price now representing "value", even though from the Betfair market something is amiss.

So another major difference is a Betfair market can be used as not only a bet/lay tool but also as a ‘snapshot’ of the latest information delivered to you straight from all the professionals involved at the track. It is quite different to a TAB or bookie market where they really aren’t interested in the real chance of a runner but more so simply pricing the runners to produce a profit.

Does this mean no long shot winners? Not at all, as everyone knows. There are probably more long shot winners in modern day racing that at any time. Also more odds-on winners compared with racing from yesteryear. A Betfair market as already suggested is a ‘snapshot’ of the current situation. The TAB $4.50 runner showing $8 indicates a possible problem. The $20 horse on the TAB showing $25 on Betfair does not. It is simply a long priced runner showing slightly longer on Betfair. The same horse showing $80 on Betfair may indicate a problem but longer priced runners are not as well scrutinized as the shorter ones. In most cases, a TAB short priced runner showing much longer odds on Betfair may indicate a failure.

As always there are no guarantees in racing. A huge price discrepancy is no guarantee the runner will fail, simply an indicator. That horse that opened the even money favorite and eases to $4.50 doesn't know the price is easing and still can jump to the front and lead throughout.

This leads to difference number 5.

5. Betfair Selection Assist

So what can you do with this information? Not much opportunity to pot the discussed runner as who wants to pot a horse at $8 on Betfair when $4.50 is wagered with books/TAB? There is no absolute guarantee that the $8 Betfair horse will lose and you would certainly feel like a total goose if you laid the runner and it won. Once again long-run probabilities apply. Generally the horse runs badly in this type of situation.

What this knowledge does allow is the opportunity to re-assess the selection process. Consider the following:

Horse Your price TAB Price Betfair Price
A $3 $4 $8
B $3.5 $6 $6
C $6 $8 $20

Horse A is your top pick based on whatever method currently used (darts, Ouija board, favourite numbers) and priced at $3. The TAB has the horse at a slight over at $4 and based on your assessment and this betting information alone your top pick looks like a healthy chance of winning the race. You check the Betfair market and whoa!! Betfair has it at $8. Clearly something amiss. Move it from top pick to perhaps a saver. So you move to the second pick. $3.5 showing $6 on the TAB, another strong well-fancied runner. But at $6 on Betfair the evidence is there to support a strong performance. A definite chance. Horse C is priced at $6 showing a slight over on TAB but way over on Betfair. Again, most likely a problem with the horse but given the lengthy price, a minor save will not greatly dent the bank .

The race runs: Horse B wins from Horse E with Horse A getting up for 3rd. You were right to alter your picks and although Betfair got it part wrong (A ran 3rd instead of as suggested, unplaced), you only fully supported horse B for a nice result.

Of course it is easy to write an almost perfect example to highlight the general benefits of using a Betfair market. Problems occur when the genuine $7 or $8 chance is showing $10 or $12 on Betfair. Does the horse have a problem or is it simply a price variation from having a 115% market compared with a 103% market? Again, if winning on horses was easy, everyone would do it. When in doubt save (unless you are betting very small amounts in which case some decision needs to be made).

For many events, a Betfair market is only useful just prior to race start. This adds considerable pressure to the punting situation and last minute decisions are often poorly planned and badly executed. This is when rigidity is a major plus. Devise a set of rules to follow when betting on Betfair. Have a set of firm prices ready to compare with the Betfair market. These prices may simply be a TAB market, your own figures or a hybrid combination. I would suggest to avoid backing any runner significantly longer or shorter priced than your figures. Much better to have a losing bet when backing a horse at $6 than at $2.

6. Using a Betfair market to simplify form study

Many races have only one or two real chances. Look to Betfair to simplify the task and hence difference number 6. Often the two top chances will be short in the market with the remainder priced at over $10. Focus your efforts on those two runners and if one stands out as a better chance then back it and maybe lay the other for the same amount. If another runner wins, then you break square on the race. Your horse wins, congratulations. The ‘donkey’ wins, bad luck. You can use a bookmaker or TAB market to also ‘study’ the form but given the earlier considerations, the Betfair market is a more accurate assessment.

7. Betfair for Re-Assessment

Another difference between the markets Betfair allows you to (re) -assess each horse’s chance. This often happens when a factor, whatever that might be, has been overlooked and then noticed, perhaps at the last minute. One recent completely incorrect wager than I made was backing a late 2yo against older horses in a maiden event. Generally, ordinary 2yo’s don’t perform well against older horses and so basically the majority are a pot in ‘open’ (age) company. Sometimes, for again whatever reason you missed the horse’s age and based on many other factors, the horse first appeared a top chance. Shebang, you notice the age and the horse goes from a top pick to a near certain failure.

But you’ve already placed the wager. TAB or bookie punters would be stuck with the bet (although you might be able to talk your way out of the bet with a bookmaker). Betfair allows a complete reversal of opinion. In the old days of futures trading, for example when trading gold you would buy one gold contract and then when you were confident of a downturn in the price, you would sell two, completely reversing your position (one to cancel out the initial trade, the second to go short gold, or in racing terms go from backing the horse to laying it).

Mistakes do happen, so having a reverse option is a real bonus. And as just suggested, it is often a great idea to reverse the position completely – that is go from backing to potting or vise versa.

8. Trading with Betfair

This leads to yet another difference. A Betfair market allows you to trade and in the end quite often take a completely neutral but profitable stance. Most punters are familiar with the notion of trading on Betfair. Simply support a horse at a longer price and lay it off at a shorter one. Alternatively lay it first at a shorter price and back it at a longer price. The term is generally known as Arbing from the business term, arbitrage. A very desirable position to be in with a profit available whether the runner wins or not. Betfair makes that position a real possibility. A whole book could be written about Betfair trading, this article simply overviews the possibilities.

9. Last Minute Decision Making

As already discussed, a Betfair market is often only useful for the last few minutes before the race and this can be a problem compared with the more traditional betting factories.

Not everthing can be perfect, especially in gambling.

10. Betfair In-Running

As briefly mentioned, Betfair also offers in running betting on some sporting events. For horse racng, the race begins and the punter is able to take a "stand" about a runner (for or against) during the event. This is a great option for a punter with some inside information on the likely racing style(s) to be displayed in a race. You like a runner if it gets a soft lead – often this becomes clear after 200 or 300m. You want to pot the favourite from an outside gate if it gets back from the jump. Sometimes the favourite instead of getting back jumps on the pace and romps in.

In running betting is great when you have some feature to check as just outlined or some other factor becomes clear after the race has started. Often the odds are as useful and sometimes better than during pre-race betting. This betting approach is not for the faint hearted with price movements moving at a frantic rate. Remember also that the race is won on the finish line not 600m from home and so be wary when betting in-running

11. Place Betting

Betfair has the usual approach to place betting and pays three dividends in fields of 8 or more runners, two place dividends for fields between 5 and 7 runners and no place pool in races with 4 or less runners. The usual deal.

However, these rules only apply to races with these nominated number of starters. So a race with only 4 acceptors will have win only betting. However if there were 5 or 6 runners and scratchings reduced the field to only 4 runners, Betfair still pays 2 place dividends. So to get a place bet collect, all you have to do is beat 2 runners. Much easier to write than to actually do. This makes place betting far more interesting as there are often very short priced place bets, some of which run in the money, and of course some that don't.

The same rule applies to races with 8 or more runners. If scratchings reduce the field to 7 or less runners, Betfair will still field the race with 3 place paying positions (depending on scratching times for some events).

12. A versus B

Still another option provided to the punter is the good old Horse A versus Horse B scenario. Betfair selects two horses which are basically close together in their abilities with perhaps differing racing styles and gives the punter the chance to wager on these runners. Basically there are four bets, either back A to finish in front of horse B or lay B, or bet B to beat A, or lay A. Basically you can take either horse A or B to beat the other performer; their finish position is irrelevant except that one horse or runner will finish in front of the other. This is another great option that can be taken on these selected events. Some races produce runners that are certain to perform badly. You know that horse A is much better than horse B and so will beat that runner, you are not sure if it will win or not, or even place. The A versus B scenario may be a better approach for this wager.

13. Other Novelty Bets

During major race days and popular racing carnivals, Betfair apart from the A versus B option offers a number of other wagers including:

  • Winner Excluding the Favourite
  • Quinella Betting
  • Runner finishing top 5 or top 10
  • Winning margin
  • Odd versus even numbers
  • Track record and quite likely many others.

These options are fairly self explanatory and can be played as a novel way of potentially making money

 

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So there you have it. 13 major areas in which Betfair is different from the traditional wagering model and why the betting exchange approach is such a popular betting platform.